Cariparma is set to defy forecasts that primary market supply for 2014 could be at an end by riding out negativity towards new issue prospects and launching a debut Italian covered bond on Wednesday, subject to market conditions.

The only benchmark covered bond last week was a Eu500m five year Pfandbrief for WL Bank, while AIB Mortgage Bank postponed a planned 10 year amid deals being pulled elsewhere in the European fixed income markets. The previous week had also ended on a sour note, with an OP Mortgage Bank Eu1bn 10 year issue disappointing at the end of a series of deals that experienced weak demand.

Cariparma’s mandate was announced last Monday (24 November), with parent Crédit Agricole running a roadshow that finishes today (Monday).

A banker close to the deal said that Wednesday is being targeted for launch, with an official mandate announcement likely tomorrow (Tuesday) morning – adding the banks that will work alongside Crédit Agricole as leads – and premarketing tomorrow afternoon.

“The feedback has been extremely encouraging compared to what some people were saying about there not being any more deals before the end of the year,” said the banker. “It will print, subject to market conditions and all that, although it is a question of price – people are sensitive and selective.”

The deal will be rated A2 and the closest recent comparable is a Eu750m seven year OBG for Credit Emiliano (Credem) that is also rated A2 and was priced at 25bp over mid-swaps on 30 October. That was said to be bid at 22bp over late Friday.

The banker suggested that Cariparma may opt for a long seven year maturity to fill a gap where there is a lack of supply in benchmark covered bonds, and also to offer a pick-up of potentially around 5bp.

“In terms of credit profile, Cariparma and Credem are more or less the same,” he said. “The plus points for Cariparma are the slightly higher senior unsecured rating, the Crédit Agricole ownership, and the new name.

“Investors love this French touch with an Italian spread,” he added.