Public holidays in Europe are stymieing supply but bankers are anticipating that activity will resume next week. Risk-on sentiment and tighter spreads have helped entice Caja Rural de Navarra to prepare a debut and another Spaniard is said to have mandated.

“The only thing that holds us off from printing are the holidays,” said a syndicate banker, adding that although credit indices traded sideways and peripheral sovereign spreads widened marginally yesterday (Wednesday), cash secondary markets remain bid-only.

In senior unsecured, curves tightened 5bp in core names while second tier peripherals came in by as much as 20bp versus a tightening of 10bp-15bp for national champions, he added. In covered bonds, peripheral markets tightened by up to 10bp, while core spreads lagged.

Another syndicate official said that peripheral spreads are back at levels that make for “much more reasonable” all-in funding costs, and that this was in part behind the mandate for Spanish credit co-operative Caja Rural de Navarra (CRN).

The lender is planning to make its public covered bond debut and has mandated Banco Cooperativo Español, Barclays, Crédit Agricole and DZ Bank for a roadshow the week commencing 20 May, taking in Frankfurt, London and Paris, with the flexibility to accommodate requests for visits in other countries.

Another Spanish issuer is also understood to have mandated for a covered bond.

CRN’s mandate hit the screens a day after Caja Rurales Unidas (CRU), the biggest credit co-operative in Spain, priced its first benchmark cédulas, a Eu500m three year, to demonstrate that market access for Spanish financial institutions has extended beyond the national champions and top representatives of the lower tier. CRU’s deal was the first from a Spanish co-operative bank since 2010 and was priced at 290bp over mid-swaps.

A syndicate official at one of the CRN mandated banks said that a transaction from the issuer would be a remake of CRU’s in the sense that they are both small issuers, even though the former’s cédulas would be better rated.

CRU’s cédulas hipotecarias are rated Baa2 by Moody’s and BBB by Fitch. Caja Rural de Navarra (CRN) is part of the Caja Rural banking group and operates in the regions of Navarra, La Rioja, Guipuzcoa and Álava. It is rated BBB by Fitch and Baa1 by Moody’s, with the issuer’s cédulas hipotecarias expected to be rated A3 by Moody’s.