Clearly oversubscribed order books on new issues for CRH, ING and UBS got the covered bond market off to a positive start today (Tuesday) with the first new benchmarks since mid-November, and a DNB issue and Aussie debuts are set to follow.

“Today is definitely a positive day,” said a syndicate official. “Expectations that we could see books double and triple oversubscribed were not met, but it’s still a very good first day.”

Another syndicate banker said that the market had got off to a pretty strong start, with slightly different investors participating than has been the norm.

“Some of the usual suspects are not there in the usual size you would expect”, he said.

Caisse de Refinancement de l’Habitat and ING launched 10 year deals this morning while UBS is selling a five year issue. Market participants said a second wave of issuance will hit the market tomorrow (Wednesday) – Friday is a public holiday for several parts of Europe.

“Everything that is on the screens could come,” said a syndicate official. “There’s jostling in the queue.”

DNB Boligkreditt has mandated Barclays Capital, BNP Paribas, Deutsche Bank and UniCredit for a new five and a quarter year benchmark and is taking indications of interest at the mid-swaps plus 70bp area, targeting launch tomorrow.

Crédit Agricole and Lloyds TSB Bank have deals in the pipeline, while three of Australia’s big four – ANZ, CBA, and NAB – have mandated lead managers for euro debuts.

Lloyds is working with Barclays Capital, Natixis and UniCredit, with a syndicate banker away from the leads saying that the issuer is considering a five year or three year trade, while Crédit Agricole has hired Danske Bank, Société Générale, UBS and UniCredit, and is said to have perhaps been encouraged by CRH’s deal and to be considering a 10 year transaction. SNS Bank went on a roadshow in December and is expected to launch a benchmark covered bond issue in January.

Market participants put the new issue premiums on the three deals in the market this morning at between 10bp and 20bp.

Caisse de Refinancement de l’Habitat tapped the market with a 10 year benchmark via leads Crédit Agricole, Deutsche Bank, HSBC, LBBW, Natixis and Société Générale, with guidance of 160bp over mid-swaps. The trade was said to have gone very well, with orders exceeding Eu1.7bn.

“There is good demand for CRH,” said a syndicate official away from the leads. “The trade is going very well from what I hear.”

At 160bp over, CRH was offering 50bp more than ING, which set guidance on its 10 year deal at 110bp over. One syndicate official said that this was having an adverse effect on ING’s deal.

“I think ING loses out because they’re competing with CRH,” he said, citing the 50bp difference between the two transactions. “Every year you get issuers pushing out trades, not thinking about how they will compete with other trades.”

Another syndicate official away from the leads also said that the 50bp difference between ING and CRH was quite high, but was less concerned about the clash.

“I think the ING level is still attractive to the Dutch, and more French investors will go to the CRH, but I don’t think the CRH has a cannibalising effect,” he said.

A syndicate banker at one of ING’s leads – Barclays, BNP Paribas, ING and JP Morgan – said that there were no negative side effects from CRH’s transaction, noting that there sovereign trading levels are wide apart, with 10 year Dutch State Loans trading around 15bp through mid-swaps and 10 year OATs at 78bp over.

ING’s leads had built a book in excess of Eu1.6bn by 1230 CET, and planned to close books by 1300 CET, with pricing fixed at 110bp over, in line with guidance.

UBS launched a five year with guidance of the low 60bs over mid-swaps. Leads BNP Paribas, Commerzbank, ING, Natixis, UBS and UniCredit set the final spread at 61bp over after gathering more than Eu1.6bn of orders, according to a syndicate official on the deal.

“It was a very good response,” he said.

Some syndicate officials away from the leads said the spread was a bit on the aggressive side, with a smaller new issue premium than on the other deals.

“If I were an investor I would see it at 65bp over,” said one. “But then UBS has not been in the market for a while, and its collateral is good.”

UBS was last in the market in August with an April 2015 issue priced at 27bp over.

Australian issuers are expected to tackle the euro market in the near future. Commonwealth Bank of Australia has mandated BNP Paribas, HSBC and RBS and is said to be considering a five year, which one market participant away from the leads said could come tomorrow. He said National Australia Bank and ANZ are also expected to launch deals this week. NAB is working with Credit Suisse, Deutsche Bank, JP Morgan and its own investment bank, while ANZ has mandated Barclays Capital, Natixis, UBS and UniCredit.

The syndicate official said he had heard a whisper of 100bp over mid-swaps for CBA, but another syndicate official said a new five year Australian covered bond in euros would likely come at 125bp-145bp over, which means Australian issuers would be paying about 40bp more than they would in dollars.

The execution of ANZ and Westpac debuts in the US dollar market in November was criticised as they widened in the secondary market. The outstanding transactions were said by one banker to be now trading at around 125bp over swaps in dollars.

National Australia Bank debuted in Norwegian kroner in December, privately placing a Nkr3.125bn (Eu403m) covered bond.