UniCredit Bank Austria is expected to launch a 10 year Pfandbrief tomorrow (Wednesday) and Société Générale SFH a five year transaction, opening this week’s covered bond market following a slow start contributed to by holidays in some jurisdictions.

Leads BNP Paribas, Deutsche Bank, ING, LBBW and UniCredit are set to launch UniCredit Bank Austria’s issue, making Bank Austria the second Austrian issuer to launch a benchmark this year, after an Erste Group Bank 10 year priced at 6bp over mid-swaps on 29 January – although Hypo Landesbank Vorarlberg also sold a sub-benchmark, a Eu300m 10 year at 7bp over on 4 February.

A syndicate official at one of Bank Austria’s leads noted that Erste’s deal was now trading at 2bp over, mid, and also cited as a comparable a January 2024 from Bank Austria, which was priced at 35bp over in 2014 and is now trading at flat tow minus 1bp. Fair value for tomorrow’s deal would therefore be 1bp-1.5bp over, he said. UniCredit Bank Austria’s last euro benchmark was a Eu500m long five year priced at 7bp over mid-swaps in September.

Société Générale SFH has mandated ABN Amro, Crédit Agricole, RBC, Santander and SG as leads for its five year obligation de financement à l’habitat transaction. That will come after French peer Compagnie de Financement Foncier sold a Eu1bn five year obligations foncières issue at 8bp through mid-swaps last Tuesday (10 February), which was yesterday (Monday) said to be quoted at minus 10bp, mid.

A SG SFH March 2019 issue was today at 13.5bp through, mid, on an i-spread basis, while SG SCF March 2020s were at 10.7bp through, according to a syndicate official at one of the leads.

Holidays in some parts of Germany early this week and in other parts of the world during the course of the week have been cited as potentially dampening supply, although market participants said that market conditions remain supportive.

The last euro benchmark covered bonds were from National Australia Bank and NordLB on Thursday, the Australian having sold a Eu1bn 12 year at 18bp over and the German a Eu500m four year at 18bp through.