Benchmark covered bond issuance is expected to resume tomorrow (Tuesday) with a newly-mandated Danske deal joining a Dexia Kommunalbank issue, while Yorkshire Building Society is aiming to be out before an ECB meet on Thursday.

The last benchmark covered bond deal was a Eu750m seven year for National Australia Bank on 21 May and the FIG market got off to a slow start overall this (Monday) morning, but syndicate officials expect covered bond supply to pick up this week.

A mandate for the Danske Bank seven year euro deal, out of its cover pool ‘I’ (international) was announced this afternoon and is expected to be launched tomorrow. The leads are Commerzbank, Crédit Agricole, Danske, Natixis and UniCredit.

Dexia Kommunalbank Deutschland (DKD) finished a roadshow a week ago and is lining up to tap the market, with tomorrow said to be the target date, and Yorkshire Building Society is also in the pipeline, eyeing Wednesday for launch of a deal, according to bankers away from the leads.

Barclays, Commerzbank, DZ Bank and HSBC have the mandate for the DKD deal, while Yorkshire Building Society has appointed Danske Bank, DZ Bank, JP Morgan and Natixis as lead managers.

A syndicate official at one of the Yorkshire leads said that the issuer is eyeing this week for a deal. A banker suggested deals would need to be launched before Thursday’s meeting of the European Central Bank– “a showstopper”, in his words.

A peripheral covered bond is also being talked about in connection with potential supply this week.

Market conditions are constructive, said bankers, noting that the market is expecting a rate cut by the ECB on Thursday and that this has been priced in.

“All good news is priced in,” said a syndicate official. “The only risk now is a risk of disappointment although people could start taking profit. Expectations are very high.”

Market participants are also waiting to see if the ECB will announce exceptional measures, such as an SME ABS purchase programme or longer term refinancing operations.