The covered bond market is likely to be quiet this week due to the Easter break and blackout periods, according to bankers, but market conditions are positive and Nordic banks, which are among the first to report results, are a potential source of issuance, while BMO is also awaited.

Syndicate officials said the subdued nature of the market is due to issuers being ruled out because of blackouts rather than a lack of interest on the buy-side, with one highlighting “strong investor flow” in SSAs as demonstrating that demand is available. A syndicate banker also noted that some issuer officials are still on Easter break.

Financial institutions have nevertheless begun announcing their results, with Spanish issuers Bankinter and Bankia having reported their first quarter results today (Wednesday), CaixaBank’s due tomorrow, and Swedish banks SBAB and SEB scheduled to release results on Friday.

A DCM banker said that non-euro-zone Nordic issuers could be tempted to come to the euro market.

“There is a decent market backdrop with trading levels not seen since 2007, and issuers will be looking at what the funding costs are compared to the domestic market and noting that these are positive by comparison,” he said. “However, it will also depend on what their funding requirements are.”

This sentiment was echoed by other syndicate bankers, with one naming SEB as a potential candidate for issuance.

“SEB has recently been focusing primarily on senior unsecured, so they are a potential issuer to enter the covered bond market,” he suggested. “Although I suspect any supply would more likely be for next week.”

SEB has yet to sell a euro benchmark covered bond issue this year, having last tapped the market at the end of October.

Bank of Montreal is also expected to issue in the near future following approval of its legislative covered bond programme by Canada Mortgage & Housing Corporation. Barclays and BMO Capital Markets arranged the programme.

The issuer releases its latest quarterly results on 28 May, and a syndicate banker said that as it is due to enter blackout soon it would have to issue in the next few days or wait until after it announces its results.