Caffil, DNB and RLB NOe-Wien built comfortably oversubscribed books for euro benchmarks today (Tuesday) despite taking supply since yesterday to Eu4.75bn, but bankers noted that moves from initial pricing levels were limited. Meanwhile, apoBank has mandated for a roadshow.

The three new issues come after Eu1.25bn seven year Nordea Bank Finland and Eu750m long five year Bank of Ireland Mortgage Bank deals yesterday (Monday), which represented an encouraging reopening of the market in terms of demand after two weeks in which only three euro benchmark covered bonds had been launched.

Syndicate officials noted that each of today’s deals followed similar approaches to pricing, with the leads offering new issue premiums of around the high single-digits to the low double-digits and tightening spreads only slightly. However, they added that each of the deals was comfortably oversubscribed.

“There is a stickiness in price traction,” said one, “but each of these trades has gone reasonably well, and show that you can get your deal done at the right price.”

Caffil leads Barclays, Crédit Agricole, Deutsche, LBBW and Natixis launched the Eu1bn January 2023 deal with IPTs of the 6bp over mid-swaps area, before moving to guidance of 5bp plus or minus 1bp on the back of Eu1.2bn of demand, excluding joint lead manager interest. The re-offer was then fixed in the middle of guidance, at 5bp.

A syndicate official at one of the leads said there had been some price resistance during the fixing of the price, and said the issuer had prioritised the size of the deal over the spread.

Lead syndicate officials said fair value for the new issue was around 4bp through mid-swaps, seeing Caffil’s January 2022 and April 2023 issues quoted at 4bp and 5bp through mid-swaps, bid, pre-announcement.

“That sort of premium, in the high single-digits, is pretty much in line with what we have seen in recent deals,” said one.

The deal is the French issuer’s fifth euro benchmark covered bond of the year, with its last having been a Eu1bn 10 year priced at 3bp over mid-swaps on 2 September.

Raiffeisenlandesbank Niederösterreich-Wien’s new issue had been expected after the Austrian issuer completed an investor roadshow last week.

Leads BayernLB, Commerzbank, Danske, DZ and Raiffeisenbank International launched the Eu500m no-grow April 2021 issue with IPTs of the 14bp over mid-swaps area. Guidance was set at 13bp plus or minus 1bp with the leads having gathered over Eu600m of orders, before the spread was fixed at 12bp.

“The deal went well especially considering the backdrop, with there being more competing supply out there this morning than we expected when we tied up the roadshow,” said a syndicate official at one of the leads. “In the end we were confident that the roadshow had lined up enough appetite for the deal and we were comfortable that with the Eu500m size we had put enough of a premium on the table.”

Syndicate officials both at and away from the leads estimated fair value based on secondary spreads to be around 5bp-7bp, seeing RLB NOe-Wien’s October 2020s and September 2025s at 4bp, mid.

The lead syndicate official added that RLB NOe-Wien’s deal was likely affected by demand for DNB Boligkreditt’s competing deal, which, he said, was announced around 15 minutes earlier on Tuesday morning.

“Investors looking at relative value would probably have gone for DNB’s trade, just looking at the wider spread they offered,” he said, “but RLB NOe-Wien’s deal would be more attractive to those looking for performance in the short run.

“Austria is a story in its own right considering their recent history, but nonetheless you still have a relatively good backbone of ongoing central bank purchases and given the smaller size of this deal it has a much better chance to perform in the short term.”

DNB Boligkreditt leads BNP Paribas, Nomura, NordLB and UniCredit priced the Eu1.25bn five year issue at 15bp over mid-swaps. The deal, which is the issuer’s first euro benchmark of the year, was launched with IPTs of the mid to high teens, before the leads moved to guidance of 15bp-17bp. The books closed at over Eu1.8bn.

“It was a good trade but we are happy with that level of demand in particular,” said a syndicate official at one of the leads.

The new issue offered around 10bp of new issue premium, according to the lead syndicate official, who saw SEB November 2020s quoted at 4bp, bid.

A syndicate official away from the leads also estimated that the deal offered a double-digit premium, which he said showed that spreads remain elevated, but said the issuer had done well to take Eu1.25bn from the market.

“Clearly it was done with an elevated premium, but printing Eu1.25bn and getting a Eu1.8bn book is a very respectable result,” he said.

The syndicate official added that it looked as though DNB Boligkredit had timed its deal to get to the market before Eika Boligkreditt, which will complete a European investor roadshow today.

“Clearly DNB would want to price tighter than Eika, and that would have been difficult had they come second,” he said.

Deutsche Apotheker- und Ärztebank (apoBank) yesterday announced a European roadshow ahead of a potential euro benchmark mortgage-backed issue. Investor meetings will commence next Monday (19 October) and run until 27 October. Commerzbank, DZ Bank, LBBW and Natixis have the mandate.