Finland’s OP Mortgage Bank priced its first benchmark euro covered bond in nearly two years today (Monday), a Eu1bn seven year that was more than twice subscribed and will be priced at the tight end of revised guidance, and syndicate bankers are expecting more supply to follow this week.

Leads BNP Paribas, DZ Bank, JP Morgan and Pohjola Bank built an order book of Eu2.3bn for the Finnish bank’s first euro benchmark since May 2012 – a Eu1.25bn five year that was priced at 32bp over mid-swaps.

Initial price thoughts for OP’s latest deal were set at the high teens over before guidance of the 17bp over area, which was subsequently revised to the 15bp over area. Having built an order book in excess of Eu2.3bn, pre-reconciliation, the leads fixed the spread at 14bp over.

A syndicate official on the deal said that it had fared well because of the issuer credit.

“It came to market with no preparation, but this was something everyone felt they need to have,” he said. “OP is everybody’s darling.”

He said that OP’s last two transactions were no longer meaningful as pricing comparables as they were more than 20 months old, and that two deals from Nordea Bank Finland, a Eu1.25bn seven year from January 2013 and a Eu1.5bn five year from January 2014, served as pricing inputs. The lead syndicate banker put the new issue premium on today’s OP benchmark at 3bp, suggesting this would allow for secondary market performance.

“The OP name has allowed this transaction to get away with a spread for a seven year deal which other issuers would not be able to get for a five,” he added.

An investor said the spread on the deal was relatively tight, but that accounts are in search of high quality offerings and that the transaction would benefit from this.

A syndicate official away from the leads said OP’s deal looked like it was an easy deal to price given the amount of oversubscription and that the issuer had obtained a “very good outcome” that shows the market is open.

“We all felt things could get tougher, but while things haven’t improved they have not got tougher,” he said. “There is a lot of cash around and people have taken this as an opportunity to get in the market.”

Some market participants have suggested National Bank of Canada as a potential near term new issue candidate given that it held a series of meetings with European covered bond investors at the end of February. However, a banker at one of the leads said the roadshow was not deal related and there is nothing imminent. BNP Paribas, Commerzbank, NBC Financial Markets and RBS had the mandate.