Cariparma benefitted from a clear market today (Tuesday) to print a Eu1bn short eight year covered bond and Kreissparke Koln sold a sub-benchmark, while SR Boligkredit and Hypo Tirol have announced roadshow mandates.

The new deals follow a busy start to the week, when five issuers priced Eu4.25bn of euro benchmarks yesterday (Monday), leading some syndicate officials to suggest the crowded state of the market was negatively affecting issues’ oversubscription levels and the ability to tighten spreads from IPTs.

Cariparma’s new June 2023 issue, which is rated Aa2 by Moody’s, is the Italian issuer’s second benchmark covered bond, following its debut trade, a Eu1bn long seven year issue in December 2014.

Leads Credit Agricole, ING, Lloyds, Natixis, Santander and UniCredit launched the Eu1bn short eight year deal with initial price thoughts of the 20bp area, before moving to guidance of the 18bp area on the back of Eu1.3bn of orders. The re-offer was set at 16bp with orders over Eu1.5bn.

A syndicate official at one of the leads said they launched the deal today to avoid competing supply yesterday and to get in before industry events in Barcelona from tomorrow (Wednesday).

“We were ready to go since Friday, but decided not to rush in on Monday in a crowded market and suspected that supply would be more limited today, the day when everyone leaves for Barcelona,” he said. “We have a clear market, no other covered bond transaction is live versus five deals priced yesterday and Eu4.25bn in total.

“That timing helped, and the markets are much better today.”

Syndicate officials away from the leads said the deal offered a new issue premium of around 15bp at the IPTs stage, noting that deals from Italian peers UniCredit and Intesa are quoted at around 4bp to 5bp, bid, in the eight year part of the curve while Cariparma’s 2022s are at 1bp.

“If the issuer doesn’t care about the last basis point, then this is a sensible approach that will ensure a big book,” said one syndicate official away from the deal. “To me, 20bp looks rather cautious.”

However, the lead syndicate official said Cariparma’s outstanding paper is squeezed and illiquid, and gives a misleading impression of the pricing.

Seeing UCGIM and ISPIM 2023-2024 paper trading in the high single digits, the lead syndicate official added that investors currently request 8bp-10bp of premium in the IPTs over secondary spreads, while supply is heavy and conditions and not conducive.

The lead syndicate official also said pricing in the range of 16bp implies a level 70bp inside the BTP curve, proving attractive to investors.

Kreissparkasse Koeln leads BayernLB, Kreissparkasse Koeln and WGZ launched the Eu250m issue with initial price thoughts of 4bp through mid-swaps. A syndicate official away from the leads said the deal seemed to have gone well.

“It is a German Pfandbrief and it looks good,” he said, “but this name does not have such a deep investor base, so doing only a deal of this size is of course right for them.”

With many market participants expected to be out of their offices from Wednesday, syndicate officials said further supply is unlikely this week, with issuers instead eyeing deals for the second half of the month.

SR Boligkreditt yesterday announced a mandate for a roadshow running from 14-16 September ahead of a possible inaugural transaction. Commerzbank, LBBW, JP Morgan and Societe Generale have the mandate.

Hypo Tirol has announced a roadshow commencing on 17 September, with leads Barclays, Deutsche, Erste, LBBW and SG.

Also in the pipeline is Caja Rural Castilla-La Mancha, which has announced a roadshow ahead of an anticipated public covered bond debut. Kutxabank is meanwhile marketing the first non-German social covered bond, which is expected next week.

“The market is taking a deep breath, and lining up for more in the latter half of September,” said a syndicate official. “It looks like we will have a very healthy pipeline, and the market remains constructive.”