A Crédit Agricole Home Loan SFH benchmark mandated today (Monday) is set to test covered bond sentiment tomorrow after a weak and subdued end to last week, as well as introduce soft bullets for the issuer. UniCredit Czech & Slovakia will roadshow ahead of a planned euro deal.

A Eu3bn dual tranche issue for Santander on Wednesday including 10 and 20 year tranches widened in the aftermarket after suggestions it had been sized too large for a Eu3.75bn order book and was said to be around 7bp wider today, while a BPCE SFH Eu750m 10 year launched on Thursday that was only marginally oversubscribed was also considered a weak signal and said to be about 2bp wider today. Away from Eurozone and hence CBPP3-eligible supply, an ANZ Eu1bn five year issue priced on Wednesday at 1bp over mid-swaps was also seen at 4bp over today.

“The last deals were a bit of a mixed bag,” said a syndicate official this morning, “and people may take this as an excuse for a break.”

However, the mandate for Crédit Agricole Home Loan SFH was announced this afternoon for launch in the near future via BayernLB, Crédit Agricole, Natixis, RBC, RBI, Santander and Société Générale. An eight year issue is planned, with outstanding Crédit Agricole January 2022s bid at an i-spread of minus 5.5bp and July 2025s at minus 1bp, according to a syndicate official at one of the leads. The closest comparable recent French benchmark was a CFF seven year that had IPTs of mid-swaps flat and was priced at mid-swaps minus 5bp.

The deal will be the first benchmark covered bond from Crédit Agricole – out of either its Home Loan SFH or Public Sector SCF – to have a soft bullet maturity, featuring a 12 month extension.

The technique is becoming increasingly common across jurisdictions, with ING having in August received approval for a soft bullet programme and Swedish Covered Bond Corporation (SCBC) having in September issued the first Swedish soft bullet. As reported on Friday, UniCredit is planning conditional pass-through OBG issuance, with only NIBC having used the format previously.

UniCredit Bank Czech & Slovakia has mandated UniCredit to arrange a series of investor meetings from next Monday, ahead of a possible euro-denominated mortgage covered bond issue. The UniCredit unit sold its first issue off a new EMTN programme in early December 2013, a Eu800m (Ck21.9bn) five year issue that was placed with Czech accounts.

The planned deal is set to be only the second internationally targeted Czech covered bond, after Raiffeisenbank a.s., a subsidiary of RBI, sold a Eu500m five year deal on 29 October, of which half was retained. That issue was sold at 32bp over mid-swaps.