A win for Greece’s pro-bailout New Democracy party in elections yesterday triggered a relief rally this (Monday) morning, but it was even more short-lived than one that followed a bail-out deal for Spain’s banks last week, with issuers likely to be put off, said syndicate officials.

Markets initially reacted positively to the results of elections in Greece yesterday (Sunday), as centre-right party New Democracy came out top to give its leader, Antonis Samaras, the mandate to seek a coalition government, but syndicate bankers said the rally had faded quickly.

“Last time it lasted a few hours, but this time it only lasted around an hour,” said one. “If I were an issuer I would hold off if I were planning to do something.

“It’s not looking good.”

Spanish government bond yields have taken a big hit, widening by some 33bp in five years to surpass Irish levels, with 10 year Bonos yields surpassing the 7% mark again.

Another said that he had hoped market conditions might allow for French issuance after Caisse de Refinancement de l’Habitat last week priced a large tap, but that although he would not rule this out today’s market weakness was not helpful. CRH on Wednesday added Eu750m to a Eu1.75bn March 2024 issue at 103bp over mid-swaps, providing the first French benchmark supply since the beginning of April.

“It’s tricky,” said the banker, noting that markets often appear to have been experiencing a period of relief ahead of key events rather than after, as fears are often priced in in advance.

“The swap curve is holding at the long end and cash is still there, but I’m not sure if this is enough,” he said in relation to issuance prospects.

“It’s tricky.”

A G20 meeting today and tomorrow (Tuesday) and a US Federal Reserve rates decision and press conference on Wednesday are some of the calendar-related “road bumps” that would have be negotiated this week, according to syndicate officials.

The only new primary market related project to have entered the public pipeline recently is for NordLB, which will next week start a roadshow in connection with its plans to issue an aircraft Pfandbrief, which would be a first for the covered bond market. Commerzbank, Deutsche Bank, NordLB, RBS and UniCredit have the mandate.