Nationwide Building Society is pricing a Eu1bn seven year covered bond today (Wednesday), continuing the run of non-Eurozone issuance around the start of CBPP3 and ahead of an expected issue for Coventry Building Society, which finished a roadshow yesterday.

Nationwide’s deal is its second euro benchmark transaction this year, after it returned to the currency for the first time since 2011 with a highly successful dual tranche deal in mid-June. That Eu1.75bn issue was split into Eu1bn five and Eu750m 15 year tranches.

The UK building society approached the market at short notice today, with Barclays, BNP Paribas, Commerzbank and HSBC going out with initial price thoughts of the 7bp over mid-swaps area. Guidance was then set at the 5bp over area and the deal is being priced at 4bp over mid-swaps, with the last update having put the books at Eu1.6bn-Eu1.7bn.

A syndicate official away from the leads said that he had suggested a similar starting point of the mid-to high single-digits and would also have targeted 4bp over from the outset. He put fair value at 2bp-3bp over mid-swaps in the context of Lloyds seven year issued in April being at 1bp, bid, Abbey fives at flat and 10s at 6bp, and Nationwide’s fives at minus 3bp and 15s at 13bp.

He said that the book size was also in line with what he would have expected.

“It’s a name that works very well,” he added. “The dual tranche deal was very well received and this looks good, to be honest.”

Another banker away from the leads also said that Nationwide’s execution had been very much in line with his expectation.

Nationwide’s issue comes a day after Coventry Building Society finished a roadshow for what is due to be its first euro benchmark since October 2011. Danske, HSBC, Natixis and UniCredit are leads.

A banker away from both UK mandates said that he did not expect Nationwide coming first to have a significant impact on Coventry’s execution.

“There’s room for everyone,” he said. “Coventry is a slightly different name, it’s smaller. If anything Nationwide was probably not super-helpful, but it won’t really harm Coventry anyhow.”

Another banker meanwhile said that everything appeared to being easily absorbed.

“It’s as easy as in 2007 to forecast where a deal will price,” he added.

He noted that a Eu1.3bn final order book for a Commonwealth Bank of Australia Eu1bn seven year issue that was priced yesterday (Tuesday) seemed rather modest, but added that the book seemed to have been of a solid quality and that the issue had performed well in the secondary market.

The CBA book comprised some 80 orders. Germany and Austria were allocated 37%, Asia 28%, Nordics 8%, France 8%, the UK 7%, Switzerland 7%, the Benelux 6%, and other Europe 7%. Central banks and official institutions took 38%, fund managers 36%, banks and private banks 14%, insurance companies and pension funds 10%, and others 2%.

Syndicate officials remarked on the lack of Eurozone supply, with the last such issue having been a Eu500m 10 year mortgage Pfandbrief for Sparkasse KölnBonn that was launched over two weeks ago, on 7 October. A euro benchmark for Coventry Building Society would mean five non-Eurozone euro benchmarks in succession without any Eurozone supply – a rare and possibly unprecedented occurrence coinciding just as CBPP3 has begun.