La Banque Postale made its public covered bond debut today (Wednesday) and Sparebanken Vest returned to the market for the first time since January 2012 to take the tally of new issues launched so far this week to five, with today’s issuers each said to have obtained a “great result”.

The strong level of primary market activity this week has not come as much as a surprise given that the covered bond deal pipeline had been – and remains – well-stocked, with issuers also having been expected to target the first half of the week given central bank meetings tomorrow (Thursday) and US non-farm payrolls on Friday, with developments surrounding military action in Syria also being closely watched.

Syndicate bankers said that the market is holding up well, even if the global market backdrop is slightly weaker, but that deals still need to be carefully pitched.

“We’re seeing deals going well and getting decent order books,” said one. “But a lot of investors are looking at other asset classes and new issue premiums there, which in senior unsecured in a lot of cases have been hefty.”

With covered bond spreads at historically tight levels and at times only “tiny” new issue premiums being paid, investors need to be presented with an attractive offer, she added.

“You have to give investors something,” she said.

New issue premiums on recent covered bonds have been in the single-digits, arguably on average around 5bp, compared with higher, double-digit concessions in senior unsecured.

La Banque Postale Home Loan SFH looks set to make a well-received debut in the benchmark covered bond market, having attracted more than Eu2.5bn of orders for a Eu1bn no-grow seven year issue.

Leads Citi, Commerzbank, Natixis, Société Générale and UniCredit announced the transaction yesterday afternoon, and began taking indications of interest this morning. These reached around Eu1.5bn on the basis of initial price thoughts of the 20bp over mid-swaps area, and after guidance of the 18bp over area, the leads will price the deal at 16bp over.

A syndicate banker away from the leads said the issuer had obtained a “great result” and that the seven year maturity was a good choice as it appeals to a broader investor base and allows for a greater focus on pricing than 10 years, for example,

The French issuer’s deal had been well flagged, after it went on a roadshow with Natixis and UniCredit earlier this summer and then carried out further investor meetings more recently. A spokesperson at the issuer had previously told The Covered Bond Report that it was aiming to launch an inaugural deal in September.

A deal from Norway’s Sparebanken Vest Boligkreditt had also been anticipated, with the issuer having announced a roadshow a few weeks ago. This ended yesterday, and the issuer today followed La Banque Postale into the market, with a five year offering.

Leads Danske Bank, HSBC, LBBW and Natixis initially marketed the deal at the 15bp over area and will price a Eu500m no-grow at 12bp over on the back of more than Eu1.25bn of orders, a result a banker on the deal said was an excellent result.

The deal is Sparebanken Vest’s first euro benchmark covered bond since January last year, when it sold a Eu500m five year at 66bp over. Its long absence from the market was the main reason for it to go on a roadshow, with an official at the issuer also noting that it intends to issue more frequently given that it will next year begin to have to carry out larger refinancings.

UniCredit Bank Austria, meanwhile, is tapping its inaugural euro benchmark mortgage Pfandbrief, a Eu500m five year issue that was first launched in July at 26bp over mid-swaps. Leads BNP Paribas, HSBC, ING, NordLB and UniCredit will price a Eu200m increase at 10bp over, after having marketed it as a Eu250m maximum transaction with guidance of the 10bp over area. Books were due to close at 1415 CET.

AIB Mortgage Bank priced its second benchmark covered bond of the year yesterday, and its third since Irish financial institutions returned to the public market following a recovery of the bailed-out sovereign.

Leads BNP Paribas, Deutsche Bank, JP Morgan and RBS priced a Eu500m no-grow five year Asset Covered Security at 180bp over, following initial price thoughts of 180bp-185bp over.

Around 90 accounts placed Eu650m of orders for the mortgage backed issue, according to a lead syndicate banker, representing relatively muted demand compared with that for other recent covered bonds.

A syndicate banker away from the leads said that the AIB deal failed to offer anything “special” and that this would have to change for the next Irish transaction.

A lead syndicate official acknowledged the relatively small size of the order book, and said that ticket sizes were somewhat smaller than had been expected, which had an impact on the order book size.

But he could not pinpoint any particular reason for the level of interest, saying that the pricing was fair and that there had not been any pushback from investors. He put the new issue premium at 5bp-7bp, citing comparables such as a Bank of Ireland Mortgage Bank issue in the 165bp-168bp range and an AIB June 2016 at around 165bp.

Another syndicate banker on the deal said that it “further highlights the continuing investor appetite for Irish credit”.

Germany took 53%, Austria and Switzerland 9%, UK and Ireland 9%, the Benelux 7%, France 7%, the Nordics 4%, southern Europe 4%, and others 7%.

Fund managers were allocated 58%, banks 32%, insurance companies 5%, retail 4%, and hedge funds 1%.

Credit Mutuel-CIC Home Loan SFH attracted Eu1.5bn of orders for a Eu1bn 10 year deal yesterday at 36bp over mid-swaps.

Austria and Germany took 31%, the UK and Ireland 18%, France 26%, Benelux 15%, Italy and Spain 5%, Switzerland 3%, and others 2%.

Asset managers were allocated 59%, banks (including private banks) 24%, insurance companies and pension funds 14%, and others 3%.