Financial institutions issuance kicked off in earnest today (Tuesday), with Caffil and Nordea leading the charge in euro covered bonds, attracting good attention amid varied FIG supply and able to tighten spreads on their 10 and five year deals, respectively.

The mid-morning verdict from syndicate bankers on a range of FIG deals was that the first round of issuance was going well, with one noting that today’s covered bond transactions – from core issuers Caisse Française de Financement Local (Caffil) and Nordea Bank Finland – were not being drowned out by other deals in the market, including from the periphery.

Italy’s UniCredit, for example, was one of several issuers tapping the euro senior unsecured market, and was a “riot” of a deal, according to a lead syndicate official, drawing more than Eu3.5bn of orders pre-reconciliation from over 300 accounts for a seven year deal that will be priced at 170bp over mid-swaps. Abbey National Treasury Services and BNP Paribas are also selling senior unsecured deals, while Lloyds Bank reopened the sterling covered bond market for UK issuers after a lengthy lull. (See separate article here.)

In euro benchmark covered bonds the first issuer to close order books on a deal this year was Caffil, which is pricing a Eu1bn 10 year obligations foncières issue at 36bp over mid-swaps on the back of more than Eu1.5bn of orders.

Leads Barclays, BNP Paribas, Commerzbank, LBBW and Natixis set initial price thoughts (IPTs) at the 40bp over area before guidance was revised to the 38bp over area.

Nordea Bank Finland was also able to tighten its spread, having started with IPTs and guidance of 8bp-10bp and ended up at 7bp over for a Eu1.5bn five year deal, with more than Eu2.2bn of orders placed, pre-reconciliation. BNP Paribas, HSBC, Nordea and UniCredit are the leads.

Syndicate bankers gave mixed assessments of new issue premiums, with one saying that in covered bonds they were in line with last year’s, but another seeing concessions as larger than in 2013, although not large.

“The Nordea and Caffil IPTs were on the slightly cheaper end, but still a fair level,” he said. “The market is supportive, but spreads have tightened too much and investors are pushing a bit more for higher spreads.”

Some syndicate officials away from the leads put fair value for a new Caffil 10 year OF variously at 30bp-32bp over and 35bp over, and saw the deal as having been marketed fairly.

One syndicate official was struck by what he described as a high new issue concession for a low beta issuer like Nordea, putting fair value in the low single-digits and therefore seeing IPTs of 8bp-10bp over as a “pretty generous starting point”.

Euro benchmark issuance is expected to continue tomorrow (Wednesday) with a deal from Australia’s ANZ Banking Group, while peripheral supply is also said to be likely to emerge.