UniCredit rounded off a resurgent week in the euro covered bond market with a Eu500m eight year Pfandbrief that bucked a trend for shorter dated issuance and swiftly attracted Eu2.2bn of demand, with bankers suggesting other issuers would be likely to follow it into the longer end.

The new issue took euro benchmark covered bond supply for the week to Eu6bn from seven deals – the most new euro benchmarks to be launched in a single week since mid-April.

“After a long lack of supply, this has been quite a week, and issuers can’t wait to join in” said a syndicate official.

Leads Commerzbank, LBBW, NordLB, Nykredit and UniCredit priced the Eu500m no-grow eight year mortgage Pfandbrief at 13bp through mid-swaps, building a final order book of Eu2.2bn, with 75 accounts. The deal had been launched with initial price thoughts of minus 9bp, before guidance was set at minus 11bp on the back of Eu1bn of orders, excluding the Eurosystem.

Syndicate officials noted the swiftness of the execution, with the leads closing books at 9:45 CET, after issuing initial price thoughts at 8:30.

“That quick execution is a sign of investor’s increasing confidence in putting their money to work, now that this latest Greek saga is hopefully over,” said a syndicate official away from the leads.

Syndicate officials also said it was a positive sign that the deal had gone smoothly with it being launched on a Friday.

“Normally you do not see much issuance on a Friday,” said a syndicate official at one of the leads, “but the book builds over this week suggested that the window would still be open today, and we have confirmed that.”

The deal also ended a run of shorter dated supply, with all of this week’s euro having been five years, except for a Eu1bn six year issue from Westpac.

A syndicate official at one of the leads said the issuer had opted for the tenor as it fit its maturity profile.

“Given the reallocation of a lot of asset managers on the back of this recent volatility, five years are the new 10 years now,” he said. “There was a question of whether an eight year would work, but the positive momentum in the market and the wide open window convinced us that an eight year could work, and we have been proven to be right.”

Syndicate officials away from the leads said other issuers would now likely be thinking about following UniCredit into the longer end of the curve.

“It’s good to see someone test the longer end of the curve, and as a AAA name UniCredit AG were a perfect candidate,” said one.

Another syndicate official agreed, but said that more defensive five year maturities would still make more sense for non-CBPP3 eligible issuers.

The deal also offered a 5bp-6bp new issue premium versus the secondary curve, syndicate officials at and away from the leads said, but they added that the German secondary curve was flat and had not moved in weeks, making the concession hard to judge.

The lead syndicate official said the bond was now trading 1bp or 2bp tighter on the secondary, with other deals launched with week also performing well.

“This shows the market is coming back onto a positive trade pattern,” he said.

“It has been a busy week,” he added. “I am sure more issuers will follow next week, and not just from the core.”