This month has been the busiest November since the onset of the financial crisis in terms of euro benchmark covered bond supply with Eu17bn of issuance, according to analysts, but expectations for December are limited, although Crédit Agricole is expected to launch a euro benchmark tomorrow (Tuesday).

Crédit Agricole Home Loan SFH is set to come to the market with a euro benchmark September 2023 issue in the near future, subject to market conditions, after a mandate announcement this (Monday) afternoon to that effect. BBVA, Commerzbank, Crédit Agricole, LBBW, NordLB, RBC and UniCredit have the mandate.

A syndicate official at one of the leads noted that Crédit Agricole 2021 and 2022 paper is quoted at 3bp to 1.4bp through mid-swaps, bid. The deal will be the second euro benchmark issue from Crédit Agricole Home Loan SFH this year, following a Eu1.25bn long six year in August.

Analysts said this month is the second heaviest November in terms of issuance since 2006, when some Eu20bn of euro benchmarks hit the market.

“With Eu33.7bn, Q4 issuance of euro benchmark covered bonds is the third highest ever already, after Eu48bn in Q4 2006 and Eu34bn in Q4 2007,” added Bernd Volk, head of covered bond and agency research at Deutsche Bank.

Analysts noted that year-to-date supply is around Eu140bn, which they said is higher than redemptions for the whole of 2015.

“This means that in 2015, covered bond net supply will be positive and that supply during this month set again a new record, with the highest November supply since the financial crisis,” said Michael Spies, strategist at Citi.

However, bankers said issuance will likely be limited in December, when liquidity is expected to dry up and with market participants expected to focus on an ECB meeting on Thursday, at which an announcement is expected on an expansion of the central bank’s asset purchase programme (APP).

“December is normally a quiet month in terms of new issuance,” said Joost Beaumont, senior fixed income strategist at ABN Amro. “This year, it will also be a month during which focus will be mainly on central banks.”

Syndicate officials said there is a narrow window for further issuance ahead of the ECB this week, and that some core and semi-core names were eyeing the market, but agreed that the pace of supply is set to slow down.

“It has been one of the more active Novembers, but you would expect it to be a quiet December, especially with eyes on the ECB,” said one. “A small handful of issuers, from jurisdictions like Germany, France and the Nordics, are monitoring conditions and thinking about whether they can sneak through tomorrow or on Wednesday.

“But you would think an issuer would need to be a strong name to come to the market now, as book builds will be slower, and any name will need to pay up.”

The syndicate official also noted that the final benchmark deal last year came on 3 December, a Eu1bn long seven year OBG for Cariparma.

“Last year the market closed early, and there may be a small window this year after the ECB, but with liquidity already drying up there surely won’t be much more supply,” he said.