Markets were more stable today (Monday) after a volatile week and although there was no FIG supply syndicate bankers said the market is still open for deals, albeit with a defensive approach to execution. Aktia and ASB are among issuers on the road this week.

Global market sentiment was more positive today after a volatile period last week, after US non-farm payrolls encouraged a late rally across asset classes on Friday. Corporates were dominating the new issue market this morning.

A syndicate official said that market conditions were somewhat more supportive this morning after spreads widened some 3bp-5bp across the curve last week due to profit-taking. The last benchmark covered bond to hit the market was a Eu500m 15 year public sector issue for Austria’s Raiffeisen-Landesbank Steiermark on Wednesday, and some syndicate bankers said a breather makes sense after last week’s volatility.

“The market for now needs more time to stabilise before we see deals,” said one, “or someone decides to pay a new issue premium.”

Indeed, others also said that the market remains constructive and open, but that issuers should adopt a more defensive execution strategy and avoid trying to price through or flat to secondary market levels, with a new issue premium of some sort advisable.

“You have to be realistic and follow the feel of the market,” said one.

She said the lack of primary market related activity today made sense even though the covered bond market remains constructive, but that it would not be surprising if deals were launched this week.

“But I wouldn’t try to price through secondaries or come super-tight,” she said.

Several issuers are on roadshow this week. Finland’s Aktia Bank began investor meetings on Thursday ahead of planned inaugural issue under the bank’s own name after a switch away from the Real Estate Mortgage Bank issuance structure.

New Zealand’s ASB Bank finishes a roadshow on Wednesday, and Italy’s Credito Emiliano is still meeting with investors. Banco Popular Español has finished a roadshow, but that is understood to be more related to a possible senior unsecured transaction.

A syndicate banker said that “strong southern European name” is a possible new issue candidate in covered bonds this week.