Four euro benchmarks hit the market today (Tuesday), with Danske, CFF, UniCredit Bank Austria selling well-oversubscribed deals, although a Santander issue was seen as less buoyant. RBC mandated for tomorrow, with further deals expected, while Commerzbank reopened 10s yesterday.

Syndicate officials said the majority of today’s deals had gone well, carrying on from the success of a Commerzbank issue yesterday (Monday) and from last weeks’ three well-received deals, after the market was reopened on Thursday by Crédit Agricole Home Loan SFH following four weeks without euro benchmark supply.

“It’s been a good day,” said one. “Premiums are still elevated in most cases, but not too far from where we were pre-summer, while oversubscription levels are still good, too, so there’s no sign of fatigue.”

Danske Bank leads ABN Amro, Commerzbank, Crédit Agricole, Danske and Natixis priced the Danish Eu1bn five year issue at 5bp over mid-swaps, with the books closing at over Eu1.9bn with more than 100 accounts. The leads had set initial price thoughts at the high single-digits before moving to guidance of the 6bp area.

A syndicate official at one of the leads said the new issue offered a 4bp premium, based on the issuer’s secondary curve.

“This has gone well, especially considering it’s such a crowded market,” he added.

Compagnie de Financement Foncier (CFF) leads BNP Paribas, LBBW, NordLB, Natixis and Santander priced the French issuer’s Eu1.5bn seven year deal at 5bp through mid-swaps, building a final order book of over Eu1.75bn. The deal was launched with IPTs of minus 1bp to flat, before guidance was set at minus 3bp.

UniCredit Bank Austria leads BayernLB, DZ, ING, SG and UniCredit were able to price the Austrian bank’s Eu500m no-grow seven year mortgage Pfandbrief at 5bp and build final books of over Eu1bn with almost 60 accounts, having launched the deal with IPTs of the 9bp area and set guidance at the 7bp area, on the back of Eu800m of IOIs.

“We are extremely happy with this result,” said a syndicate official at one of the leads.

He said the new issue offered a 5bp final premium.

Meanwhile, Banco Santander leads Deutsche, Natixis, RBS and Santander gathered Eu1.1bn of orders for the Spanish Eu1bn seven year issue, which was priced at 9bp after having been launched with IPTs of the low 10s area and guidance of 10bp.

Syndicate officials away from the leads suggested the trade had underperformed relative to the day’s other deals, although they said that to print Eu1bn at 9bp was still a reasonable result for the issuer.

“The only disappointment today might be that the Santander hasn’t had quite as much leverage to be able to move through the gears in the same way as the other issuers,” said one. “But this is a busy market, so it’s not a surprise to see the higher beta transaction be the poorest performing over the course of the day.”

Another syndicate official said he believed the issuer had been overambitious in its approach.

“They should have settled for plus 10bp and been happy with it,” he said. “All the others have been conservatively priced, sensibly so, and have done well despite the competing supply.”

However, a syndicate official at one of the leads said fair value for the new issue was around 2bp, noting that BBVA January 2022 paper was being quoted at around flat, bid.

“Obviously there was a lot of competing supply out there today, and Spanish spreads have compressed a lot year to date, so there were some investors that though it looked rich,” he said. “However we were able to move the spread in and overall it worked, even if it was not quite as nice as some of the other trades today which were able to move in further from their IPT level.

“When you look at it versus today’s deals, some might say it looks rich, but there always could be some investors that haven’t managed to pick up Spanish paper, and they were involved today.”

Syndicate officials meanwhile said the trades from CFF, BACA and Danske each started with new issue premiums of around 8bp-12bp, noting that each had tightened by around 4bp.

“This was a good way to go,” said one. “Their syndicates can all be pleased.”

On Monday Commerzbank had launched the week’s first covered bond transaction, despite the UK being closed due to a public holiday. Leads BayernLB, Commerzbank, DZ, LBBW and Natixis priced the Eu500m no-grow 10 year mortgage Pfandbrief at mid-swaps minus 13bp, building a final order book of Eu1.3bn with 40 accounts participating.

The leads went out with initial price thoughts of the minus 9bp area, before guidance was set at the minus 11bp area with IOIs of over Eu600m.

A syndicate official at one of the leads said the outcome justified the issuer’s decision to move on Monday and get out ahead of anticipated competing supply today.

“With a deal like this, a 10 year Pfandbrief deeply in the minus, we all felt we did not need London, and we were proven right,” he said. “We had the market all to ourselves, so I don’t think we missed a single account.”

Syndicate officials noted the deal was the first benchmark covered bond with a 10 year maturity since a Eu750m BNP Paribas issue in April.

“It is pleasing to see that part of the curve reopened and that investors have appetite for longer dated paper,” said one.

Royal Bank of Canada this morning announced a mandate for a euro denominated long five year issue that is expected tomorrow (Wednesday).

A syndicate official at one of the leads – Deutsche, Natixis, ING, UBS and RBC – said the most relevant comparable for the new issue is RBC’s August 2020s, which he saw trading at 2bp, mid.

RBC’s most recent euro benchmark covered bond was a Eu1bn seven year issue on 10 June.

Syndicate officials said further new deals were likely tomorrow, despite some wider market weakness having emerged around lunchtime today.

Meanwhile, Commonwealth Bank of Australia launched a hard to soft bullet consent solicitation today, with CBA and Credit Suisse as solicitation agents. (Further details to follow tomorrow.)