Banco Popular Español and BPER showed the depth of demand for peripheral names today (Tuesday), printing five year covered bonds that bankers noted were able to tighten well from IPTs, while Berlin Hyp attracted Eu1.6bn of orders for a Eu500m three year offering a minimal coupon.

The new Spanish and Italian deals came after AIB Mortgage Bank yesterday (Monday) launched the first euro benchmark from a peripheral name since 29 May, with the Irish Eu750m five year issue finding Eu1.4bn of demand in a deal syndicate officials said would likely encourage other non-core issuers to follow.

“There is now a demonstrated good peripheral bid in the covered bond market,” said a syndicate official involved in today’s supply. “Last week was more about the reopening of the market.

“We saw the German and the non-Eurozone names, but certainly from Wednesday onwards trades went very well and we’re seeing that continue with other jurisdictions.”

Banco Popular Español (BPE) leads Banco Popular, BNP Paribas, Citi, HSBC and Nomura priced the Eu1.25bn long five year Spanish issue at 37bp over mid-swaps, having built a final order book of Eu2.3bn. The deal was launched with initial price thoughts of 40bp-45bp, before guidance was set at 37bp-40bp.

A syndicate official at one of the leads said the deal went well, noting that they had received sufficient demand to print at the tight end of guidance despite there being other deals in the market.

“It’s a very good result in what was a very busy market, but the tone is strong and issuers can take advantage of this decent window,” he said.

The lead syndicate official said the deal offered a new issue premium of the low double-digits.

“From the IPTs, that’s one of the higher starting new issue premiums that we’ve seen,” said a syndicate official away from the leads, “but it was the right thing to do for this name, and they’ve been able to tighten well.”

Banca Popolare dell’Emilia Romagna (BPER) leads Banca IMI, Credit Suisse, RBI, RBS and Société Générale launched the Eu750m five year deal – the issuer’s third euro benchmark – with initial price thoughts of the low 20s over mid-swaps. Guidance was then set at the 20bp area, before the re-offer was set at 18bp, with books closing at around Eu1.4bn.

“Overall this is a very good trade,” said a syndicate official at one of the leads, citing in particular as a positive the amount of tightening between the initial price thoughts and the re-offer.

“This is the first Italian issue since the reopening of the market last week, and that’s a good sign.”

The new issue is the first from an Italian name since a UniCredit Eu1bn 10 year in February. BPER last tapped the euro benchmark market in January, with a Eu750m seven year issue.

Syndicate officials said the deal offered a new issue premium of around 10bp, with the lead syndicate official citing the issuer’s October 2018 paper as being quoted at minus 2bp, mid, and its January 2022s at plus 8bp.

Berlin Hyp leads ABN Amro, Commerzbank, HSBC, LBBW and UniCredit skipped an initial price thoughts stage to launch the Eu500m no-grow three year Pfandbrief with guidance of minus 10bp. The re-offer was fixed at minus 12bp, before books closed at Eu1.6bn with 40 accounts.

“We are especially happy given the low swap levels,” said a syndicate official at one of the leads. “Swaps came further down this morning, and if you print any tighter than this you are talking about a zero coupon bond, which we obviously want to avoid.”

The lead syndicate official said the bond would likely offer a coupon in the range of 0.025% to 0.05%.

“We are very happy to find so much demand at such low levels,” he said. “This is a very good result.”

Bankers away from the deal noted that Berlin Hyp launched its deal relatively late in the morning. The lead syndicate official said this was because the leads were deciding whether to go ahead while two other deals were in the market.

“But especially as we expect more short dated Pfandbriefe to follow we decided to go ahead and test the momentum of the curve and be the early one, rather than the follower,” he said.

Syndicate officials put fair value for the new issue at around minus 16bp-15bp, based on the issuer’s secondary curve.

Meanwhile, Royal Bank of Canada is launching a $500m (Eu461m, C$649m) no-grow three year SEC-registered FRN today. Leads HSBC and RBC have gone out with IPTs of the three month Libor plus low 30s area.