Kutxabank has mandated a roadshow to begin on Monday, with a cédulas expected shortly thereafter, while syndicate bankers predicted heightened activity in covered bonds next week and mandates from Scandinavian issuers, following several weeks interrupted by holidays across Europe.

Spanish issuer Kutxabank has chosen BBVA, Commerzbank, Crédit Agricole, HSBC and Nomura to lead manage the roadshow, which will run from Monday to Thursday with investor meetings in France, Germany, the Netherlands and the UK, to discuss a potential covered bond issue. A syndicate official at one of the leads said that following the roadshow a deal could be expected.

Syndicate bankers said that investor interest and the market for peripheral issuance is receptive, with one noting that existing cédulas have tightened 5bp-10bp on the secondary market over the past month.

“Even today, peripherals have moved in the right direction, and with the broader market pretty flat peripherals have been holding in good stead,” he said. “The technicals for peripherals remain fairly robust, with more redemptions than supply in past few weeks.”

He added that with yields and swap rates continuing to drop, core European issuance is arguably more challenging.

Another syndicate banker said that there is “tonnes of money out there, waiting to be put to work”.

Kutxabank’s last euro benchmark covered bond was a Eu750m four year issued in January 2013, which was priced at 220bp over mid-swaps after drawing more than Eu3.5bn of orders.

The last Spanish covered bond was a Banco Popular Español Eu1bn five year, issued on 1 April and priced at 115bp over, with a Eu2.25bn book.

Away from Kutxabank, a syndicate official said that while there are no mandates yet announced for next week, half a dozen issuers are assessing the market. The syndicate banker said that he expects at least two transactions, but added that there could be as many as four.

“Decisions can be made quite quickly at the moment and I would not be surprised if a mandate was announced later today for a Monday deal,” he said. “Monday seems to be the preferred day at the moment, with Tuesday and Wednesday also an option, and for the latecomers maybe even Thursday.”

Another syndicate banker said he would not be surprised if there were three or four deals next week, noting that a number of Scandinavian banks had recently exited blackout and suggested that they may be a source of issuance.

However, this idea was downplayed by a syndicate banker who said that he believed that while Scandinavian issuers were looking at the market, their focus would more likely be on the senior unsecured side, which he said was “looking more attractive at the moment”.

He nevertheless added that if the window for covered bonds looked good then one or two may take the opportunity to issue before the summer break.