Norway’s DNB made a swift market entry this (Monday) morning while Aareal and Deutsche Hypothekenbank have joined Terra BoligKreditt in the pipeline, as a deal to rescue Spain’s banks buoyed market sentiment and triggered an issuance spree across asset classes.

Euro-zone finance ministers on the weekend agreed to lend Spain up to Eu100bn to recapitalise troubled banks in an attempt to draw a line in the sand ahead of Greek elections on Sunday. Despite outstanding questions about the source of the loan and the conditions attached to it, the deal has greatly lifted market sentiment, triggering a wave of new issuance across asset classes as the senior unsecured and corporate markets also got off to a busy start this week.

“Rates are backing up, there’s huge positive sentiment and all the indices are pointing in the right direction,” said a syndicate official earlier this morning. “If I were an issuer this would be a great window.”

Some seven new issues were out in the corporate market this morning, including one for Telecom Italia that a syndicate banker said was a sign of the extent of the positive tone.

“The market is such that even the Italians are starting to come back,” he said.

The senior unsecured market has also sprung into action, with Svenska Handelsbanken and Swedbank among the issuers accessing the market. The cross-currency basis swap has been putting off Swedish issuers from turning to the euro benchmark covered bond market given domestic levels, but a syndicate official said that a need to raise senior unsecured funding will have encouraged the banks to take advantage of the prevailing issuance window.

In the euro benchmark covered bond market DNB Boligkreditt was the only issuer out with a live deal, but there is no shortage of deals being lined up for execution tomorrow and/or later in the week. A Eu500m deal from fellow Norwegian issuer Terra BoligKreditt is well anticipated given that the issuer went on a roadshow last week, having mandated Commerzbank, Nordea, UBS and UniCredit, while Deutsche Hypothekenbank, a subsidiary of NordLB, and Aareal Bank today announced mandates for Eu500m no-grow five year mortgage Pfandbriefe.

Deutsche Hypo is planning to come to market tomorrow (Tuesday), with leads Barclays, BayernLB, Commerzbank, Deutsche Bank and NordLB this afternoon gathering indications of interest on the basis of initial price thoughts of the low teens.

A syndicate banker away from the leads said a Deutsche Hypo deal should come wider than Pfandbriefe for Berlin-Hannoversche Hypothekenbank and LBBW from just over a week ago given that Deutsche Hypothekenbank’s covered bonds are rated Aa2 by Moody’s and the issuer’s secondary market curve is much wider than the other issuers’. Moody’s cut Deutsche Hypo’s Pfandbriefe from Aaa to Aa2 on Friday as part of various rating actions on German covered bonds. (See separate article.)

Aareal Bank is working with Deutsche Bank, DZ Bank, HSBC, LBBW and WGZ Bank. Its Pfandbriefe are expected to be rated AAA by Fitch. Landesbank Hessen-Thüringen has also been mentioned as a possible new issue candidate for this week, as has France’s CRH, while a syndicate official also wondered whether well-funded issuers like ABN Amro and ING Bank could be lured to come to market.

“DNB set the tone by going out super-punchy, and others can leverage off that,” he said, adding that the senior unsecured market is also being looked at by issuers.

BayernLB has cropped up in the new issue pipeline context on several occasions as well, but The Covered Bond Report understands that the bank does not have a current new issue project.

DNB Boligkreditt will price a Eu1.5bn deal at 40bp over mid-swaps, in line with guidance of the 40bp over area, after having received some Eu1.7bn of orders from around 85 accounts, according to a lead syndicate banker. BNP Paribas, LBBW, UBS and UniCredit are bookrunners.

Syndicate officials said the re-offer spread was inside secondary market levels, with one seeing an outstanding 2017 issue at 35bp over bid and putting a new seven year deal in the low to mid 40s over.

“It’s punchy and it’s hard to see the rationale for the 40bp area,” he said, wondering if the pricing would prevent the issuer from sizing a Eu2bn plus deal, as it has frequently done in the past.

“But if there is a time to try a super-tight deal this is probably it,” he added.

Another syndicate banker away from the deal also put DNB’s 2017s at around 35bp over bid, and a 2021 issue at around 55bp over, adding that this would on a straight line basis put a 2019 at around 45bp over bid. Another said the pricing was spot-on rather than punchy, and that pricing inside of secondaries was not a big surprise.