National Bank of Canada and pbb are poised to kick off supply this week in euro covered bonds after announcing deal mandates today (Monday) on the back of a constructive reaction to a Crimea referendum yesterday, while NIBC is preparing a second partial pass-through issue.

Deutsche Pfandbriefbank (pbb) is targeting a Eu500m no-grow five year mortgage Pfandbrief for which it has mandated DekaBank, DZ Bank, Natixis, NordLB and UniCredit. The deal is expected to hit the market tomorrow (Tuesday), subject to market conditions. It would be pbb’s second euro benchmark covered bond of the year, coming after a Eu500m no-grow eight year mortgage issue in mid-January, which met with a reticent response from investors. A Eu500m 15 month public sector Pfandbrief for LBBW from late February is the last German Pfandbrief to have been priced.

National Bank of Canada

National Bank of Canada is also planning to tap the market, having announced a seven year transaction to be lead managed by BNP Paribas, Commerzbank, NBC Financial Markets and RBS.

A syndicate official said that the issuer is targeting tomorrow to launch a deal, with the market having shown itself to be “resilient to geo-political events”.

NBC held investor update meetings at the end of February/early February to meet with those investors it had not seen during a roadshow in December before it sold its first legislative issue and inaugural euro covered bond. That was a Eu1bn five year.

A deal from NBC would be the second euro benchmark from a Canadian issuer this year, after Caisse centrale Desjardins du Quebec on 3 March made its euro and legislative debut. That was a Eu1bn five year that was priced at 15bp over mid-swaps on the back of modest demand, with some Eu1.2bn of orders placed.

NIBC Bank, meanwhile, today announced that it has mandated JP Morgan, LBBW, NIBC, RBS and Société Généralé to organise a series of investor meetings as it prepares its second conditional pass-through (CPT) euro benchmark.

The Dutch bank is scheduled to meet with investors from Friday (21 March) to next Thursday (27 March), with an issue targeted thereafter, subject to market conditions.

NIBC last came to the euro benchmark market in October, when it issued the first ever legislative partial pass-through covered bond, a Eu500m five year mortgage backed issue that was priced at 50bp over mid-swaps. Leads Credit Suisse, LBBW, NIBC and RBS built an order book of more than Eu1.3bn for the deal, which has since tightened to 29bp over, according to a syndicate official.

A syndicate official away from the leads said a follow-up deal would be interesting to follow given the tighter spread at which the debut is trading, while another said that NIBC’s second issue will show whether the CPT structure is merely a fad or has gained acceptance in the market.

Today’s mandate announcements come after a referendum on the political future of Crimea yesterday (Sunday), in which more than 95% of voters were in favour of Crimea becoming part of Russia, an outcome that was largely expected. The Ukrainian government is not recognising the results and the US and EU have said it was illegal.

The general feeling among syndicate officials was that the referendum has largely been well absorbed by the market, with one describing it as “a damp squib”, but that there is a degree of cautiousness.

One syndicate banker was bullish on market conditions, describing market conditions as positive.

“FIG and SSA issuers were as expected using today to monitor the market, but there will be a lot of traffic tomorrow,” he said. “It should be business as usual, with something for everyone.”

Another said that market conditions are not as strong as at the beginning of last week, but that “wobbles” are fading. Another said that the market is in decent shape but that “if cities in east Ukraine start saying ‘Russia, come and rescue us,’ investors could get shaky.”