CFF gathered over Eu1.4bn of orders for a Eu1.25bn five year issue today (Tuesday) while WL Bank received over Eu600m of demand for a Eu500m eight year, and bankers said the flow of deals will likely continue after eight benchmark deals hit the market in the first two days of the week.

The two core issuers launched their deals this morning after announcing mandates yesterday (Monday) afternoon. Together with new issues today from Banca MPS and UBI Banca (see separate article), the deals took supply to Eu6bn this week – the same amount as in the whole of last week.

Compagnie de Financement Foncier (CFF) leads Danske, DZ, Natixis, SG and UniCredit priced the Eu1.25bn five year obligations foncières at 2bp over mid-swaps on the back of books above Eu1.4bn excluding joint lead manager (JLM) interest. They launched the French issuer’s deal with initial price thoughts of the 3bp area and maintained that level for guidance after gathering over Eu1bn of IOIs.

“This went very well,” said a syndicate official at one of the leads. “If you put it in perspective and look at the demand some other deals got today, then CFF did well to get books over Eu1.4bn and get a good balance of real money interest and support from the ECB’s covered bond purchase programme.

“The deal was not entirely dependent on CBPP3 and that is encouraging to see.”

A syndicate official away from the leads said CFF’s deal appeared to be the day’s best result.

“Clearly they’ve got good demand and the price feels right,” he said. “We haven’t seen too many deals of that size recently, so it’s good to see and it’ll be interesting to watch how it performs on the secondary market.”

The lead syndicate official said the deal offered a new issue premium of around the high single-digits, seeing CFF November 2020s at minus 7bp, bid.

The new issue is CFF’s fifth euro benchmark covered bond this year, with its last having been a Eu1.5bn February 2023 issue on 1 September.

Westfälische Landschaft Bodenkreditbank (WL Bank) leads DZ, Helaba, HSBC and WGZ launched the German issuer’s Eu500m no-grow Pfandbrief with guidance of the minus 7bp area and fixed the spread at minus 8bp. The books closed at above Eu600m with 30 accounts, excluding JLM interest.

“The books are not the biggest we’ve seen, but the demand was good at this level and in the end it was comfortably oversubscribed,” said a syndicate official at one of the leads.

Banks were allocated 50.5% of the deal, central banks 38.0%, asset managers 10.9%, and insurers 0.6%. Accounts in Germany took 90.8%, Norway 4%, Switzerland 4%, and Austria 1.2%

Syndicate officials noted that the deal followed a series of Eu500m five and six year German Pfandbriefe that were priced at minus 10bp, with MünchenerHyp, Berlin Hyp and LBBW all printing deals at that level this month.

“Bearing that in mind, minus 8bp for an eight year feels like a strong outcome,” said a syndicate official away from the lead.

The new issue is WL Bank’s fourth benchmark of the year, with each of its previous deals Eu500m issues and the last a seven year sold in June.

Syndicate officials said that they expect the flow of new issues to continue, with an ECB meeting on Thursday seen as being unlikely to interrupt supply.

“Things are picking up in other markets, too, with deals going well across the board,” said one. “They are showing that there is good appetite out there for issuers to tap into.”