A Eu500m seven year Bank of Ireland issue was seen as the pick of the lot in a busy benchmark covered bond market today (Wednesday) and also as an encouraging sign for peripheral supply, with three other deals, including a rare 15 year issue, for Caffil, also going well.

All four transactions – for HSH Nordbank and RLB NOe-Wien on top of Bank of Ireland Mortgage Bank and Caffil – were publicly announced yesterday (Tuesday) for execution today, and order books were duly opened this morning.

This is the first time this year that this many deals have been out at the same time in the euro benchmark covered bond market, but syndicate bankers appeared unconcerned by the supply thrust.

One noted that the supply is varied, comprising issuance from core and non-core jurisdictions and across maturities, and that the deals were limited in size from the outset.

All four deals are Eu500m no-grows. Ratings range from an expected Baa3 from Moody’s for Bank of Ireland’s deal to triple-A ratings for RLB NOe-Wien’s and Caffil’s (albeit with the latter having an AA+ from Fitch). HSH Nordbank’s mortgage Pfandbrief issue is expected to be rated Aa3 by Moody’s.

Other market participants cited support for the covered bond market in the shape of redemptions.

“With Eu13.6bn in euro benchmark coupon and redemption payments made in September and Eu20.5bn coupon and redemption payments due in October, we don’t expect this covered bond issuance to exert significant pressure on spreads,” said Maureen Schuller, head of covered bond strategy at ING Bank.

A syndicate official also cited redemptions as a bolstering factor, but said that today will be a “big test” for the covered bond market given the number of deals out at the same time.

Another said that the Caffil and Bank of Ireland transactions were the two to watch as a gauge of market sentiment. He expected Caffil’s new issue to have been “pretty well lined up” and said that the deal for Bank of Ireland went very well.

Bank of Ireland Mortgage Bank’s transaction attracted the most demand of the four issues on offer today, drawing Eu2.4bn of orders to a seven year asset covered security (ACS). Leads Citi, Danske, Deutsche, Nomura and RBS will price the Eu500m no-grow at 195bp over mid-swaps after having gone out with initial price thoughts of 200bp-210bp over. Guidance was set at the 200bp over area.

“It was a very strong trade,” said a lead syndicate official.

The deal is the issuer’s second benchmark covered bond this year, coming on top of two for Irish peer AIB Mortgage Bank. The latter sold a Eu500m five year at 180bp over mid-swaps on 3 September, and a syndicate official away from today’s Bank of Ireland deal said the re-offer spread on the new issue looked reasonable compared with where AIB came.

The transaction is an encouraging sign for peripheral issuers after more modest demand for recent transactions of that nature, according to the banker, who cited an Intesa Sanpaolo deal some two weeks ago.

“It demonstrates that there is still a lot of demand for peripherals in covered format as long as there is additional yield there from a duration perspective.

“It’s great for investors, it’s great for issuers.”

A five year OBG for Intesa on 12 September was the last peripheral benchmark covered bond to have been priced, and had to be sized at Eu750m rather than the Eu1bn that had been targeted.

Another syndicate official said that the Bank of Ireland initial price thoughts were unnecessarily wide, and that the 200bp over area would have been a sufficiently attractive starting point. At 195bp over, the deal is coming flat to Irish government bonds, he said.

Caisse Française de Financement Local (Caffil) has closed books on a public sector obligations foncières issue in the rare 15 year maturity, extending the issuer’s curve from 2024 to 2028.

Leads Crédit Agricole, Morgan Stanley, Société Générale, RBS and UniCredit gathered nearly Eu1bn of orders and will price the deal at 50bp over mid-swaps after initially marketing it at the low to mid 50s over.

“We’re very happy with the result,” said a lead syndicate official. “You don’t see a 15 year every day and 50bp is pretty tight given other French long dated outstandings, an the pick-up to OATs is in the single digits.”

A syndicate official away from the leads said that at 50bp over, the new issue is coming 7bp-8bp back of French government bonds, with the premium to OATs needed to attract domestic investors.

He said that the deal will have been somewhat more challenging than the others in the market today on account of the long dated maturity and factors such as some investor caution toward the issuer, which is the successor to Dexia Municipal Agency, and line availability issues. The leads had taken a fairly defensive approach, he said, but adding that they could not have done more.

HSH Nordbank, meanwhile, is set to price a Eu500m no-grow five year mortgage Pfandbrief at 18bp over mid-swaps. Leads BNP Paribas, Deutsche Bank, HSH Nordbank, NordLB and UniCredit initially marketed the deal at the low 20s over, and built an order book in excess of Eu1bn.

Raiffeisenlandesbank Niederösterreich-Wien (RLB NOe-Wien) followed up on a roadshow last week by today opening order books on a Eu500m maximum seven year mortgage backed covered bond.

Leads Crédit Agricole, DZ Bank, LBBW, JP Morgan and RLB NOe-Wien gathered more than Eu1bn of orders and have priced the deal at 10bp over mid-swaps, the tight end of guidance of 10bp-12bp over.