Demand and pricing on long-dated CaixaBank and Nationwide Building Society benchmarks fell short of bullish expectations today (Wednesday), with syndicate bankers attributing slow execution to wider market weakness this morning, particularly in peripheral government bonds.

Nationwide is pricing a Eu750m 12 year benchmark at 10p over mid-swaps via leads BNP Paribas, HSBC, RBS and UBS. This follows initial price thoughts and guidance of the 10bp area and came on the back of a final order book of around Eu950m.

CaixaBank, meanwhile, is pricing a Eu1bn 10 year at 15p over via CaixaBank, Commerzbank, Goldman Sachs, Natixis and Nomura. This comes after IPTs and guidance of the 15bp over area, with the book only around Eu750m when guidance was set.

“The market has softened since they were announced,” said a syndicate official away from the two deals, “and it seems the tone is definitely impacting them. There has been a very aggressive tightening of SSAs since QE was announced and we have now seen some selling, so maybe after tightening alongside SSAs covered bonds are suffering some spillover.

“It’s not usual for deals to take this long,” he added.

A syndicate banker at one of CaixaBank’s leads said that they had been unlucky with the timing.

“Spain and Italy went pear-shaped as we opened books,” he said, noting that while there had been renewed Greek tensions, this was no surprise, and he instead described the weakness as a technical correction.

“The market had been so bullish for so long,” he said.

He noted that the BTP future had at one point been down 150 ticks but by early afternoon had recovered to be only 10 ticks down on the day, while 10 year Bonos were only 3bp wider versus Germany, having earlier today been 15bp wider.

“We would of course – like Nationwide – like to have tightened it,” he added, “but we got to the billion mark and it’s another deal done.”

Another banker away from the two deals said that although senior financials had widened over the past week, some by more than 10bp, this should not have affected the covered bond market.

“Senior is more nervous, but I am not sure that is a factor in covered bonds given that already last week we saw several covered bonds and Bankia in particular was resilient,” he said. “We do have the FOMC today, but that isn’t really something that should affect euro covered bond issuance.”

Some market participants away from Nationwide’s leads described its re-offer of 10bp as generous, with one saying that he had expected the re-offer to be 6bp-7bp over, while another said he had pitched for a 10 year at the low to mid-single-digits, noting that the curve from 10 to 12 years is quiet flat.

The deal is the first UK euro benchmark of the year and another syndicate banker contrasted the size and demand with Nationwide’s most recent benchmark issuance, a Eu1bn seven year that attracted a book of over Eu1.6bn in October and an acclaimed Eu1.75bn two tranche issue in June 2014 that attracted a combined Eu3.5bn of demand.

Market participants also noted that, being outside the remit of CBPP3, UK issuance offers a pick-up over core names – with Nordea Bank Finland, for example, having priced at Eu1bn 12 year at minus 2bp on Tuesday of last week (10 March) – and they had expected investors to be attracted to this.

A banker at one of Nationwide’s leads noted that the investor base for deals beyond 10 years is always more limited and that the issuer had been able to achieve its targeted benchmark-sized transaction with a nice level of oversubscription. He said that the issuer was right to size the transaction appropriately at Eu750m relative to the Eu950m order book to ensure secondary performance for those investors involved in the deal.

A syndicate official away from CaixaBank’s leads said that he had expected a better reception given that Bankia priced a Eu1bn 10 year at 42bp over mid-swaps last week on the back of a Eu2.8bn book.

“To be honest I would have expected more demand,” he said. “Bankia got a super-strong reception and it was the problem-child of Spain. CaixaBank is stronger and there are also a high level of redemptions and coupon payments of cédulas this month supporting new issues if investors want to maintain their level of exposure.”