Bankinter launched a long awaited cédulas issue this (Monday) morning, with syndicate officials away from the leads approving of initial guidance of the 275bp over area for a five year deal. Meanwhile, a Scandinavian issuer is said to be planning to come to market soon.

Bankinter’s deal is the first cédulas benchmark in almost three weeks, and only the second to feature a five year maturity since the market reopened at the beginning of February.

Market participants were hopeful for more mandates this week.

“After the solution of the Greek PSI and the CDS, the market is still open for covered bond issuers,” said one syndicate official, adding that a Scandinavian issuer was highly likely to come to the market this week.

DNB Boligkreditt was rumoured to be considering launching a 10 year deal, although bankers on Friday said the prospect of this had receded.

Another syndicate official said that the cross-currency swap was not efficient for other Scandinavian names and another noted that Pohjola Bank had been a candidate for covered bond issuance but opted to tap the senior unsecured market instead.

“I think a lot of issuers – if they can afford it – go down the senior unsecured route instead of covered,” he said.

He added that the low yield environment translated into a lot of work being necessary to convince issuers to launch deals.

Another syndicate banker said Sweden’s Nordea Hypotek and SEB had been cited as new issuance candidates.

“I would have thought that they would have been out this morning,” he said. “I’m not sure what they’re waiting for.”

No Swedish issuer has come to the market this year, and Swedbank Hypotek was the last to come to the market in 2011, in August with a Eu1.5bn four year at 46bp over.

Bankinter, Barclays Capital, Crédit Agricole and Nomura launched Bankinter’s five year deal at the 275bp over mid-swaps area this morning, with guidance subsequently revised to the 270bp over area.

The leads built an order book of “well over” Eu1bn, according to a syndicate official on the deal. He said that “a fair amount” of foreign accounts participated, although this would need to be firmed up at a later stage.

A deal from Bankinter had been rumoured for some time, and the syndicate official said that the issuer had been considering a transaction for a couple of weeks and could have launched a deal earlier, but was keen for market conditions to be positive.

“With Greece out of the way it’s time to get serious,” he said.

The deal was very well received, he added, and represented “a great achievement” for Bankinter and other cédulas issuers by showing that the market is open to lower tier names beyond the three year maturity.

Syndicate officials away from the leads agreed that the spread at which the deal was first marketed was appropriate, with one saying the deal was “reasonably” priced and others saying that the 275bp over area is where they would have set the level.

“The spread is to be seen neutrally,” said one, adding that it was neither overly cheap nor overly expensive, and putting the coupon at around 4.25%.

Another said 275bp is where he would have priced it.

“We had the same pricing in mind, so it was spot-on,” he said. “This was based on the most recent Spanish deals and versus Spanish government bonds.”

Bankia was the last Spanish issuer to come to the market prior to Bankinter. It launched a Eu500m two year deal on 22 February at 290bp over area.

“It’s going OK-ish,” said the syndicate banker. “It’s not a blowout, but obviously it’s making its way, collecting interest.

“Bankinter is pretty good credit and has a solid business plan,” he added.