Issuers are likely to take advantage of further opportunities to launch new euro benchmark covered bonds next week even as an anticipated summer lull begins to take effect, according to syndicate officials, after nine deals this week showed demand for new issues remains deep.

Four successful euro benchmarks yesterday (Thursday) – from Bankinter, Deutsche Pfandbriefbank (pbb), Nationwide and WL Bank – rounded off a busy week in which nine deals totalling Eu7.25bn were sold – and bankers said demand for new paper remains strong.

“We’ve had a very decent week,” said a syndicate official. “We’ve seen a good variety of deals, from some very tight Eu500m Pfandbriefe transactions to large peripheral trades.

“It’s encouraging that we’ve seen all of these deals work, and oversubscription levels have been quite healthy, showing that the depth of demand is there.”

Despite anticipating the summer break to kick in next week, with liquidity expected to dry up, syndicate officials said the continuing demand for new paper will tempt some issuers into the market.

“There are still a handful of names contemplating deals for the early part of next week, so we should see more activity, even while we’re creeping into that summer lull,” said one.

Another syndicate official said he expected peripheral issuers in particular to be eyeing the market next week, noting that some Spanish issuers were coming out of blackout.

He said peripheral names would also be encouraged by the oversubscription levels and spreads achieved by a Banco Popular Español Eu1.25bn long five year trade and a Eu750m five year BPER issue on Tuesday, and by Bankinter’s Eu1bn seven year yesterday.

“For those guys, after the market was closed for so long, these are still decent levels,” he said. “Next week, for them, there’ll still be opportunities.

“The window is absolutely going to be open.”

Some syndicate officials said issuers may alternatively look to issue in senior unsecured, after that market also reopened last week, but were confident that one or two names will still tap the covered bond market.

However, one syndicate official said an FOMC meeting on Wednesday could interrupt issuance.

“After that, supply might dry up,” he said. “People have been quite focussed on that, and it might give them a reason to step back and finally take a break for the summer.”

While they differed on how long activity will continue, syndicate officials said this week’s deals showed that the market was recovering well, after having been closed for four weeks.

“The market is back to normal to a degree,” said one. “Germans are accessing the market at impressive levels – supported because the spread versus Bund looks attractive – and we’ve also got peripheral trades working well.”

However, bankers noted that new issue premiums still appeared to be elevated when compared with levels before the latest Greek crisis, in particular for peripheral issuers.

“But if you put this in the context of the market having been completely shut for quite a few weeks, it’s very encouraging to see supply picking up and issuers coming forward at current spreads,” said one.

Some syndicate officials, meanwhile, noted that the market was yet to see a deal with a maturity of the 10 year area.

“Definitely the market is better, whether it is back to normal is difficult to say,” said a syndicate official. “The covered bond space is a long-end market. Issuers tend to prefer a bit more duration in covereds than they do in other markets.

“We still haven’t seen any 10 year supply – and I don’t think the market is fully back to normal until we do.”

Given a slightly higher new issue premium, a 10 year deal would work in prevailing conditions, the syndicate official said, adding that other issuers would then likely follow into the longer end.

“It’s a question of putting it on the line,” he said. “Arguably it would be difficult for a peripheral issuer, given the steepness of the sovereign curve right now, but some leadership from the national champions would be nice to see right now.”