A mandate for a benchmark euro mortgage Pfandbrief is due to be announced this (Tuesday) afternoon, adding to a total of Eu2bn of German supply via three deals last week, while Suncorp is expected to launch its debut in Australian dollars soon.

Bankers said that broader market conditions remain challenging and fragile, with risk-aversion driven in particular by concerns about Spanish banks and sub-sovereigns. But while the Bund future continues to trade at historically elevated levels, credit indices look supportive, they said.

“I would be pretty surprised if there weren’t supply this week,” said one. “There are potential candidates.”

A syndicate official said he expects one or two euro Pfandbrief mandates to be announced and others said that an announcement of a German mortgage backed benchmark is due this afternoon. Aareal Bank and Münchener Hypothekenbank have cropped up in discussions as possible new issue candidates.

Berlin Hyp, LBBW and Deutsche Pfandbriefbank together sold Eu2bn of mortgage backed Pfandbriefe last week. Berlin Hyp priced a Eu1bn five year at 9bp over mid-swaps, LBBW a Eu500m no-grow six year at 7bp over, and pbb a Eu500m maximum seven year at 60bp over.

Strong issuers from strong jurisdictions should meet with a good reception if they come to market, said one banker, with German, Dutch, Swedish and “even” French issuers potentially fitting the bill.

Others said that the cross-currency basis swap was not in favour of euro issuance for non-euro-zone issuers such as the Swedes, with one noting that Landshypotek had earlier this week issued a new five year Swedish covered bond. The deal was for Skr2bn (Eu223m) and was priced at 87bp over mid-swaps.

Suncorp-Metway Limited has mandated Barclays, Deutsche Bank, RBC Capital Markets and UBS to lead manage an Australian dollar deal that would be the first from an Australian financial institution away from the four majors.

The maturity has yet to be finalised, but the four to five year range is under consideration, according to a syndicate banker familiar with the new issue project.

“They did a bit of work and have taken direction from some investors,” he said. “They’re looking to do something in the near future.”

A 140bp over mid-swaps level has been mentioned in connection with a new issue, which a syndicate official away from the leads said sounded “about right” given that a Suncorp deal would need to come some 30bp-40bp back of an offering from one of the big four.

Suncorp on 17 May released a US$5bn (Eu3.95bn/A$5.04bn) programme, and Fitch and Moody’s have assigned provisional triple-A ratings to a first issuance off the programme.

As reported yesterday, Clydesdale is expected to this week make its debut, in sterling.