UniCredit launched the first peripheral supply since early July today (Thursday), a Eu1bn seven year OBG, while KBC is selling a Eu750m three year covered bond, with UniCredit’s deal seen coming some 100bp through its sovereign and KBC’s some 10bp back of OLOs.

Today’s deals bring this week’s total benchmark covered bond supply to Eu3.75bn, via four transactions, as issuers take advantage of an accommodative primary market to make early post-summer moves. Syndicate bankers expect supply to continue next week, with one estimating that some five deals are in the pipeline.

UniCredit had been mentioned as a new issuance candidate earlier this week and launched its deal after what a syndicate banker said was a better market opening than on previous days.

Leads Banca IMI, Banco Santander, Deutsche Bank, JP Morgan, Lloyds and UniCredit will price a Eu1bn seven year obbligazioni bancarie garantite (OBG) issue at 95bp over mid-swaps, the tight end of guidance of 95bp-100bp over. Initial price thoughts were in the 100bp over area and attracted indications of interest in excess of Eu1.2bn. The final order book is said to amount to Eu1.5bn.

UniCredit’s deal is the first from a peripheral jurisdiction since early July, when Credito Emiliano sold a Eu500m seven year deal at 180bp over. UniCredit last tapped the benchmark covered bond market on 4 June, with a Eu1bn long five year OBG.

Syndicate bankers away from today’s deal for UniCredit said that the pricing was in line with their expectations and spoke of a 5bp to “high single-digits” new issue concession.

The OBG is coming some 100bp through Italian government bonds, according to one syndicate official, which he suggested could make the deal look cheap as other comparables trade tighter in relation to BTPs, although the issuer’s curve is in his opinion the better reference.

KBC offered rare Belgian supply in the form of a Eu750m three year offering, which leads Commerzbank, Deutsche, ING, KBC and UniCredit will price at 5bp over, the tight end of guidance of 5bp-7bp over. Orders exceeded Eu1.3bn.

At 5bp over, the deal would come some 10bp back of Belgian government bonds, according to a syndicate banker away from the leads, who noted that previous KBC deals had come through OLOs on other points of the curve.

Three years is the only maturity that allows for a pick-up over OLOs, noted a syndicate banker.

Another said more demand for the issue could arguably have been expected given the rare opportunity to obtain three year paper from a core European issuer, but that single-digit pricing could be too tight for some accounts.

KBC started issuing covered bonds in December last year, and had tapped five year, 10 year and seven year maturities, in that order, before today’s short dated move.

Deutsche Pfandbriefbank (pbb) tapped a recent 15 year public sector Pfandbrief by Eu200m to take the issue size to Eu750m. The new issue was re-offered at 40bp over mid-swaps on 22 May via BNP Paribas, Commerzbank, Deutsche, JP Morgan and LBBW, and the same leads will today price the increase at 25bp, which a lead syndicate official was roughly flat to secondaries.

“The deal performed strongly but we knew that there was still end investor demand for the bonds after the initial issue was launched and the all-in level is interesting for yield hunters,” he said.

The tap comes a day after pbb sold its fourth euro benchmark covered bond, a Eu500m five year mortgage Pfandbrief that was priced at 9bp over on the back of Eu900m of orders.

“The current issuances underscore pbb’s position as a frequent issuer,” said a spokesperson for the bank yesterday.

Sixty accounts participated in the new issue. Germany and Austria took 63.8%, the Nordics 11.4%, the UK and Ireland 7%, Asia 6%, Switzerland 4.2%, Italy 3%, the Benelux 2.6%, and central and eastern Europe 2%.

Asset managers were allocated 42.7%, banks 39.5%, central banks 9%, private wealth 5.4%, and pension funds and insurance companies 3.4%.