Crédit Mutuel CIC Home Loan SFH and UniCredit Bank AG tapped the covered bond market this (Monday) morning with seven year issues printed inside initial guidance, adding to the renewed wave of core issuance that started last week.

Some syndicate bankers are expecting more deals to hit the market this week, potentially also from peripheral issuers, although there was little concrete evidence this morning of deals being lined up.

“The market is not that bullish, but there have been good inquiries on peripheral names in the secondary market,” said one. “The appetite is there.”

Austria’s Vorarlberger Landes- und Hypothekenbank (Hypo Vorarlberg) finished a roadshow last week and is set to make a decision this afternoon about its strategy for a deal, which would be its inaugural benchmark mortgage Pfandbrief. Barclays, Crédit Agricole, DZ Bank, LBBW and UniCredit have the mandate.

Meanwhile, Germany’s Sparkasse KölnBonn begins a roadshow today. The issuer, which is eyeing its first benchmark covered bond since 2008, announced the mandate last week and is working with Deutsche Bank, DZ, Helaba, LBBW and RBS.

UniCredit launched a Eu500m no-grow seven year mortgage Pfandbrief issue that was priced at 14bp over mid-swaps, a pricing that a syndicate banker away from the leads described as “a bit generous” compared to other recent Pfandbrief issues and UniCredit’s outstanding curve, but he said it was justified by ongoing uncertainty in Italy.

Leads Crédit Agricole, Deutsche Bank, DZ Bank, NordLB and UniCredit priced the deal 1bp inside guidance of 15bp-17bp over mid-swaps, which followed initial price thoughts of the high teens.

According to a lead syndicate banker, orders reached Eu600m before the opening of the books and closed at more than Eu1bn.

A syndicate banker away from the leads said that the deal looked “interesting”. He said that 14bp over mid-swaps seemed a bit of a generous level considering that a Eu500m 10 year public sector Pfandbrief issued by BayernLB was priced at 11bp over mid-swaps last Thursday. He also mentioned that an outstanding UniCredit 10 year issue was trading at around 8bp over mid-swaps in the secondary market.

“But at the end of the day, UniCredit is an Italian issuer,” he said. “As Italy remains a question mark, I think it’s wise for them to offer a bit of a pick-up when they approach the Pfandbrief market.”

“UniCredit is a sensible issuer,” he added.

A syndicate banker on the deal rejected the idea that the spread was generous, saying that secondary market indications are not necessarily a reliable guide for discerning new issue premiums, and that it is important to gain a sense of the level at which accounts “care”.

“MüHyp was the same,” he said. “You have to pay over what you see on the screen and you have to take into account that it is still UniCredit risk. It’s an excellent result.”

Münchener Hypothekenbank sold a Eu750m eight year at 3bp over on Thursday.

UniCredit’s last benchmark mortgage Pfandbrief was a Eu500m eight year issue priced at 22bp over mid-swaps on 12 September.

Crédit Mutuel CIC Home Loan SFH (CM-CIC) also launched a seven year issue today, a Eu1.25bn deal that was priced at competitive levels in comparison with recent French trades, according to a lead syndicate banker.

Leads BNP Paribas, Danske Bank, HSBC and Natixis set initial price thoughts in the high 20s, guidance at 25bp over mid-swaps and fixed the re-offer spread at 23bp over.

The deal attracted around Eu2bn of orders from 90 accounts, according to a lead syndicate banker.

Another lead syndicate banker said that pricing the deal at 23bp over mid-swaps was a good result for CM-CIC since a Eu1bn seven year deal by French peer BNP Paribas was priced at 22bp over mid-swaps last Wednesday.

CM-CIC’s deal offered some 25bp pick-up over OATs, a level similar to BNP Paribas’s deal, said the lead syndicate banker, adding that this was also a good result for CM-CIC.

A syndicate banker away from the leads said that CM-CIC’s secondaries are very illiquid and comparables were bid at 26bp over mid-swaps before the trade, and put fair value for the deal at 25bp over.

He said that leads adopted the right execution strategy, starting from attractive spread levels and then tightening the spread to below guidance.

“This shows that investors are no longer sensitive to spread levels,” he said. “Yes, the deal did not attract the Eu4bn order book of HSBC, but you don’t expect it anymore.”

HSBC SFH priced a Eu1.25bn 10.5 year issue at 35bp over that attracted Eu4bn of orders on Tuesday.

A CM-CIC lead syndicate banker said that the issue did not suffer from the competing supply of the UniCredit deal, as the two trades were in “two different spread territories” and UniCredit would attract mainly domestic demand.