Euro benchmark covered bond supply got off to a modest start today (Monday) via a cédulas tap for Spain’s Banco Popular and an FRN Pfandbrief increase for pbb, but the market is “wide open for anyone who wants to take chips off the table”, according to one syndicate banker.

Banco Popular Español is out with a tap of a March 2017 cédulas hipotecarias via leads BPE, Crédit Agricole, HSBC and Société Génerale. Guidance is at the 205bp over mid-swaps area and more than Eu400m of orders have been placed, according to a syndicate official on the deal.

The 205bp over level is roughly mid-market, he added. The order books were still open at the time of writing.

The underlying issue was first launched as a Eu600m five year at 255bp over in March 2012 and the increase is for a minimum of Eu250m, with a view to taking the deal to Eu1bn, according to another lead syndicate banker.

A syndicate banker away from the leads saw the March 2017 cédulas trading at around 195bp over mid, putting the new issue concession at around 10bp, while another saw the increase coming flat to possibly slightly through the bid side. He said it was a good liquidity trade.

The last time that Banco Popular tapped the benchmark covered bond market was in January, when it sold a Eu500m six year at 270bp over. The last Spanish issuer to have sold a deal was Cajas Rurales Unidas, which launched a Eu500m three year cédulas at 290bp over on last Tuesday (7 May).

The only other covered bond in the market today was also a tap, for Deutsche Pfandbriefbank. The issuer added Eu150m to a Eu100m April 2016 floating rate public sector Pfandbrief first launched in April 2012. The tap was priced at 20bp over three month Euribor via DZ Bank, Natixis and UniCredit and was a very German affair, according to a banker at one of the leads.

Several syndicate bankers said that they did not have any deals in the pipeline for imminent execution, but that market conditions and sentiment are supportive.

“There seems to be a bit of a correction after the recent rally, but the market opened fairly reasonably this morning and is stable,” said one.

RBS analysts said that they do not think Moody’s downgrades from last week have undermined “buoyant overall sentiment”, and a banker agreed with this, saying that the strength of the wider market prevented a six notch cut of Co-Operative Bank from affecting the rest of the market.

A syndicate banker said that although he did not have any firm new issue projects in the pipeline several issuers had been requesting market updates this morning, and that the market dynamic remains supportive.

“The market is wide open if anyone wants to take chips off the table,” he said.

Another syndicate banker suggested that a top tier Spanish bank and a Norwegian issuer, perhaps SpareBank 1 Boligkreditt, could be new issuance candidates, as well as Belgium’s KBC when it comes out of blackout. Another said that higher swap rates could make long dated issuance more appealing.

The only mandate in the public pipeline is for a Caja Rural de Navarra roadshow commencing 20 May, which could lead to the Spanish co-operative bank’s inaugural deal. Banco Cooperative Español, Barclays, Crédit Agricole and DZ Bank have the mandate.