European markets opened marginally positively today (Monday), but syndicate bankers said they expect little to no benchmark covered bond supply this week, citing heavy supply last week, uncertainty about Syria, and an industry conference in Barcelona.

Those canvassed this morning were of the same opinion, namely that the primary market is unlikely to see much activity this week, although they appeared to differ slightly in their views of the quality of last week’s transactions.

Nearly Eu5bn of benchmark covered bond supply across six new issues hit the market last week to make for one of the busiest issuance periods of the year, but one syndicate banker had little positive to say about the deals. Besides a debut for La Banque Postale Home Loan SFH and a decent issue for CM-CIC Home Loan SFH the transactions were “not that great”, he said.

Interest rates and spreads are stable, he said, but issuers coming to market this week would need to offer a chunky new issue premium and would not want to be responsible for a repricing of the market that this could entail.

“This week will be quiet,” he said.

Another syndicate official was more positive about last week’s deals, and said that market conditions remain supportive for issuance but that there are also plenty of reasons for issuers to keep their distance from the market, such as uncertainty about Syria and the direction of interest rates.

Another syndicate official said that if a deal has not hit the screens by tomorrow (Tuesday) morning then that will probably mean the week passes without any benchmark supply. The European Covered Bond Council (ECBC) is holding a plenary in Barcelona on Wednesday, which will be followed by another industry event the day after, and syndicate bankers said this was another reason why issuers were unlikely to launch deals, at least later this week. New issuance around the time of the conference is not unprecedented, but a syndicate banker pointed out that the US Congress is scheduled to vote on military action in Syria on Wednesday and that this was another factor speaking against new supply.

A supply lull would most likely be a temporary occurrence, however, given that several issuers are on roadshows ahead of possible transactions. Austria’s Kommunalkredit has been roadshowing since Wednesday, with meetings continuing this week, while Bank of Montreal has mandated Barclays for a series of euro fixed income meetings starting tomorrow (Tuesday), and Raiffeisenlandesbank Niederoesterreich-Wien begins a roadshow next Wednesday (18 September).