There were no signs of new euro covered bond supply being prepared for imminent launch this (Monday) morning, according to syndicate bankers, despite “solid enough” market conditions and a positive impression made by a blow-out senior trade for Portugal’s BES last week.

A senior unsecured deal for Norway’s SpareBank 1 SR was the only new FIG issue in the market, with Barclays having announced a mandate for a contingent capital transaction. Syndicate bankers did not seem to be holding their breath for new covered bond supply, however, with the week ahead throwing up plenty of data to negotiate and more Q3 results due to be released.

After a relatively busy week for euro benchmark covered bonds last week – two deals priced in one day – no new issue projects were being lined up for execution in the immediate future. One syndicate banker said a couple of covered bond projects were under discussion, but that these were not imminent.

The blow-out Eu750m three year senior unsecured issue for Banco Espírito Santo (BES) on Wednesday caused quite a stir in the markets, heralding as it did the reopening of the Portuguese FIG market after more than two years without new issuance and prompting questions about the prospect of follow-up supply.

A syndicate official this morning suggested that potential follow-up deals were being explored, which in his view would be likely to take the form of senior unsecured rather than covered bonds.

“My hunch is that using assets is still too expensive for the Portuguese,” he said, “when you can get cheap funding at the ECB.”

However, another syndicate banker said that discussions about any sequels to BES’s move.

“Everyone is still quite buoyed by the performance of BES, which is trading well up,” he said, “but there are no firmer conversations.”

Market conditions are “solid enough”, said the syndicate banker, but issuance opportunities are likely to get more complicated as the week progresses in light of events such as US elections, a long dated Spanish government bond auction on Thursday, and continued results announcements.

“I’m not expecting a deluge of covered bonds,” he said.

The European Central Bank and the Bank of England will also announce rates decisions on Thursday.

Another syndicate official said that he was not expecting any supply, but that he wouldn’t exclude new deals being launched, with BES’s move, for example, “quite surprising”.

“Funding needs aren’t that big,” he said, “and the week didn’t start on a very positive note.”

He noted that BES’s deal was now trading through the sovereign, and questioned whether this was an inviting level.

Priced at 540bp over mid-swaps, BES’s transaction was said to have closed 20bp inside the three year Portuguese government on Friday.

Another syndicate banker noted that French banks are heading into blackout this week, and that the market situation remained unchanged in terms of an imbalance between supply and demand being supportive.