The FIG market got off to a strong start today (Monday) with activity in the hybrid capital and senior unsecured segments, and while the start of a Kutxabank roadshow was the only primary market-related move in covered bonds at least one deal is expected this week.

Danske Bank was out with a Tier 2 transaction this morning and Spain’s Bankia announced the mandate for a subordinated debt deal of its own, while BNP Paribas tapped the market with a 10 year senior unsecured issue, the first FIG flow funding transaction this month.

In covered bonds Spanish issuer Kutxabank starts a roadshow today, which is expected to end on Thursday. The mandate was announced on Friday, awarded to BBVA, Commerzbank, Crédit Agricole, HSBC and Nomura, with issuance of a cédulas expected shortly after the end of the roadshow, which would be the bank’s first benchmark covered bond since January 2013.

Syndicate officials said that the FIG market had opened strongly this morning, with one referring to “a couple of nice trades”.

Another said that although issuers have been “silent” with mandate announcements they have been bringing syndicates together with a view to coming to market this week, adding that a German bank was close to announcing a deal, and that there could also be supply from the Nordics.

“There will be one covered bond, at least, this week,” he said. “And there are a further two on the side-lines.”

Another syndicate official said that issuers recognise that covered bond spreads are compelling at the moment, with the euro market attractive versus Swedish krona, for example.

He suggested that covered bond deals will also hit the market this week but that this may be the result of a “process of elimination”, after deals in other asset classes are considered.

However, syndicate bankers also suggested that covered bond supply will remain relatively modest, with one noting that deals will come in “bits and pieces” and another saying his “toolbox is empty” and that he wouldn’t be able to name a potential candidate for issuance.

“There may be some sort of reciprocity deals announced, but if there’s not much today, there won’t be much tomorrow,” he said.