Stadshypotek priced a Eu1.25bn five year covered bond today (Monday), the joint tightest post-crisis non-German euro benchmark covered bond, while Banca Santander Totta is set to return with its first deal since 2010 tomorrow.

Leads Barclays, BNP Paribas, Nomura, Svenska Handelsbanken, and UBS collected more than Eu1.75bn of orders for the Stadshypotek deal. Following initial price thoughts of the high single-digits, the leads announced guidance of 7bp over mid-swaps on the back of Eu1bn of orders. Strong demand allowed the deal to be driven tighter still and priced at 5bp over.

Royal Bank of Canada also sold a five year at that level, in October 2013, while KBC achieve the level in August 2013, albeit in the three year maturity. Only German Pfandbriefe have been priced tighter since the onset of the financial crisis.

A syndicate official at one of the leads said that there was no new issue premium.

“Starting off with high singles gave us good momentum,” he said. “The first revision at 7bp over was to test the waters for going tighter, and the order book gave us this ability.”

He added that the issuer did not want a huge transaction, but was rather looking to set a new benchmark point on its covered bond curve.

“This was successful transaction, and as it is coming through the Nordea, this is a strong statement from Svenska,” said the syndicate official. “In terms of pricing we were looking for a Eu1bn print, but given the size and quality of the book it was upsized.”

A syndicate official away from the deal said that a supportive market with a lot of liquidity had allowed the leads to price so tightly.

The last euro benchmark covered bond from the Swedish issuer was a Eu1bn seven year priced at 9bp over in October 2013.

Portuguese issuer Banca Santander Totta announced that it has mandated Bank of America Merrill Lynch, BNP Paribas, Crédit Agricole, Santander and UniCredit for a three year euro benchmark covered bond.

A syndicate official at one of the leads said that he expects the deal to go live tomorrow morning.

“Banca Santander Totta’s last transaction was March 2010, so investors have to refresh credit lines,” said the syndicate official. “The feedback so far is strong and good, so we do expect the transaction by tomorrow morning, subject to market conditions.”

Two cédulas hipotecarias, a January 2017 and an April 2017, issued by Santander and trading on the secondary market at 47bp over are being used as reference points, as well as two Caixa Geral de Depósitos covered bonds, a December 2016 and a January 2018, trading at 103bp over and 112bp over, respectively.

“We expect this deal to come inside of the Caixa deals as they are wider, especially the January 2018,” he said.

In addition, the syndicate official said that he expects the deal to come inside two Portuguese government bonds, an October 2016 and an October 2017, currently trading at 103bp over and 155bp over.

“Covered bonds from all peripheral countries will come through government bonds, especially from a strong name,” he added.