The euro covered bond market burst into action today (Tuesday) via new issues for Crédit Agricole Public Sector SCF and Belfius plus a pbb tap, with CA’s deemed a “blowout” by one banker and Belfius seen achieving a solid trade but pushing pricing.

Deutsche Pfandbriefbank (pbb) was also in the market this morning, with a Eu250m tap (see below), and together with the new issues for Crédit Agricole and Belfius Bank Eu1.75bn of euro benchmark covered bond supply will have hit the market today as issuers took advantage of what bankers said was a positive market environment.

More issuance could be forthcoming this week, they said, although tomorrow (Wednesday) is probably the only day left for deal execution given a public holiday in parts of Europe on Thursday. Caja Rural de Navarra went on a roadshow last week, via Banco Cooperativo Español, Barclays, Crédit Agricole and DZ Bank, but no update was available on its plans. Crédito Emiliano has also been roadshowing and could favour a covered bond as part of any issuance plans. New Zealand’s ASB Bank will hold investor meetings in early June, working with Barclays and UBS, but the nature of any issuance plans has not been specified. New Zealand covered bond legislation is working its way through the country’s parliament.

Crédit Agricole Public Sector SCF launched its second benchmark covered bond today, a 10 year obligations foncières issue for which leads ABN Amro, BBVA, Commerzbank, Crédit Agricole, and Société Générale gathered more than Eu1.8bn of orders. They will price the deal at 31bp over mid-swaps, the tight end of guidance of 33bp over mid-swaps plus/minus 2bp, which followed initial price thoughts of the mid 30s. More than 100 accounts participated, according to a lead syndicate banker.

He said that the re-offer spread of 31bp was roughly flat to OATs, and that not breaching French government bond levels was the key focus for pricing. The May 2023 OATs widened somewhat during bookbuilding, he added.

A banker earlier this morning had said the deal was coming wide of OATs – “the all important thing for French investors”, although several others put it flat to French government bonds and said the pricing was appropriate.

One described the transaction as solid, as is the case for Belfius’s deal, but another was more positive, calling Crédit Agricole’s trade the “blowout transaction of the day”. He said that the deal was 10 cents up on re-offer in the grey market.

Crédit Agricole’s public sector obligations foncières issuer made its debut in September last year, with a Eu1bn seven year that came at 50bp over mid-swaps. A syndicate banker on today’s deal said that issue was trading at around 13bp over mid yesterday. The covered bonds are backed by loans guaranteed by export credit agencies, which are in turn backed by their respective sovereigns.

Belfius Bank is out with its third euro benchmark covered bond, a Eu500m maximum seven year that comes a week after its peer KBC Bank sold a Eu1bn seven year. Syndicate bankers away from Belfius’s transaction said it was orientated around that of KBC – a “carbon copy”, said one – and that it was a solid deal but coming at a tight level.

KBC’s benchmark was re-offered at 16bp over on the back of around Eu2bn of orders from 138 accounts. Syndicate officials away from today’s deal said it is trading around that level.

Belfius went out with initial price thoughts of the high teens via leads Barclays, Belfius, LBBW, Société Générale and UBS, with guidance subsequently set at the 17bp over area. The Covered Bond Report was unable to obtain an update from the leads about the size of the order book by the time of publication.

A syndicate official away from the leads said that indications of interest had amounted to Eu500m-Eu600m.

Syndicate bankers away from the deal did not criticise the level that Belfius went out with, but said that a tighter spread would not be possible or recommended.

“The level is pretty stretched and although it doesn’t make the deal a bad one I think it reached the limit,” said one.

Another said that the 17bp over area was “a bit skinny”, coming so close to where KBC’s deal is trading.

“16bp over would be too tight, 17bp over fair, and 18bp over reasonable,” he said.

However, he noted that the deal is coming through Belgian government bonds, with the interpolated OLO curve at around 25bp over, and that this would make for “a good print”.

Deutsche Pfandbriefbank (pbb) met with more than Eu450m of orders for a Eu250m increase of a 1.5% March 2020 mortgage Pfandbrief, and priced the tap at 16bp over mid-swaps via leads Commerzbank, DZ Bank, Goldman Sachs, LBBW, NordLB and UniCredit.

A reverse enquiry provided the impetus for the reopening, said a syndicate official on the deal, with the leads able to build a strong order book taking in additional demand.

Initial price thoughts were set in the 18bp over area, with guidance set at 16bp-17bp over when the order books were officially opened at 0930 CET. Around 15 minutes later they were shut and the spread fixed at 16bp over. That compares with pricing of 25bp over when the underlying issue, for Eu500m, was first launched on 11 March. In line with much of the rest of the market the deal has tightened considerably, and was trading around 17bp/15bp over yesterday, according to a lead syndicate banker.