Westpac NZ is expected to come to market next week with the first benchmark under New Zealand covered bond legislation, and Berlin Hyp has announced a mandate for a five year that is expected for Monday’s, with bankers expecting further French and German supply, even with the World Cup underway.

Westpac New Zealand has completed a roadshow after having mandated Barclays and UBS to organise the series of investor meetings, which began last Monday. Syndicate officials away from the leads said that they expect a euro benchmark from the issuer to make up part of next week’s business.

“Westpac New Zealand for next week,” said one. “I’d be surprised if they didn’t pull the trigger.”

Another syndicate banker said that he would put fair value for a five year deal at the 20bp over mid-swaps area, using as comparables an ANZ New Zealand October 2017, today trading at 6bp over, and an ANZ New Zealand October 2018, at 14bp over, noting each year of extension being worth 8bp.

Should the expected deal come to market, it will be the first under new legislation for covered bonds that came into effect in December in New Zealand. In April Westpac NZ became the first issuer to register under the new framework.

The syndicate official said that he did not believe the new legislation would have much of an impact on the pricing of the deal, but he added that it would be an interesting one to watch.

New Zealand’s ASB Bank has also been arranging investor meetings with parent Commonwealth Bank of Australia and JP Morgan, although its programme does not yet appear in the Reserve Bank of New Zealand register.

Berlin Hyp is the first official name in the pipeline for next week, with the German bank announcing today (Friday) morning that it has mandated for a five year euro benchmark.

The German issuer has mandated Commerzbank, Crédit Agricole, DekaBank, LBBW and NordLB to lead manage the five year euro benchmark transaction, which a syndicate official at one of the leads said he expects to be Monday’s business.

A syndicate banker away from the leads said that he believed a German issuer of Berlin Hyp’s calibre could price at flat to mid-swaps on a good day.

Berlin Hyp last issued in April, with a Eu500m seven year mortgage-backed Pfandbrief, which gained Eu800m of orders and was priced by the leads at 5bp over.

Syndicate bankers said that, providing there are no major political developments over the weekend in relation to developments in Iraq, they would be surprised if there were no further mandates announced today or Monday, noting the strong shape of the market for covered bond issuance. Another German issue is said to be considering mandating a 10 year, while a French issuer is also expected.

One syndicate banker noted that the football World Cup, which kicked off in Brazil last night and will run for the next four weeks, could affect issuance, with both investors and issuers open to distraction. He added though, that those “committed” to coming to market would not be distracted so easily.

“That said, you don’t want to be carrying out investor meetings in London at 5pm when England are playing,” he said. “The same goes for France’s and Germany’s games.”