An end-of-summer reopening of the covered bond market is deemed possible next week, with two deals in other asset classes having this week suggested that successful new issues are there for the taking, according to bankers. Meanwhile, BPM is set to roadshow a new programme.

Euro benchmark covered bond supply was completely absent from screens this week after having last week been confined to a Eu300m tap for Crédit Agricole Home Loan SFH, and – with the notable exception of the latest Danish auction season – other currencies failed to provide any sizeable issuance.

However, bankers cited successful deals from Bank Nederlandse Gemeenten (BNG) in the SSA market and Landesbank Hessen-Thüringen (Helaba) in the financial institutions space as having shown what is possible.

Having gone out on Tuesday with a modestly-sized senior unsecured two year FRN in mind, Helaba’s leads attracted over Eu1bn of demand and priced a Eu1bn deal.

“This was not really what we had in mind,” said a syndicate official at one of leads BNP Paribas, Commerzbank and Helaba. “It gives an indication that many investors are back at their desks, and that should also apply for a covered bond transaction.

“I reckon two-thirds of investors are up-and-running and ready to act, while 90% should be there next week, providing even more depth. However, the market could be a bit more crowded.”

BNG was meanwhile able to print a Eu1.75bn seven year issue on Wednesday.

“This was remarkably well received,” said another syndicate official. “It shows that cash is there.

“If someone felt like doing something in covered they would probably find a very receptive environment. But many issuers would perhaps rather leave it to someone else, like a top name, to set the first test.”

Bankers said that discussions about potential issuance had been stepped up this week.

“There have been many more conference calls this week than last,” said one, “so there are a range of issuers eyeing the market.”

He suggested that, with peripheral names having seen their covered bonds perform well in the secondary market, such issuers could approach the market.

Another syndicate official said that he is optimistic about supply next week, even if the market closed a little weaker today, mainly on the back of China-inspired concerns. He also noted that from mid-September timing could become more tricky, with a key FOMC meeting and elections in Greece and elsewhere.

“If there is a window now, why not take it?” he said.

Banca Popolare di Milano (BPM) has meanwhile mandated Barclays and Banca Akros to hold a roadshow for a new covered bond programme from 1 September. BPM last issued a benchmark covered bond in 2011 and the new programme, which is expected to be rated A2 by Moody’s, was described as a “modernised” one by a banker involved in the project.