With accounts shutting down and liquidity drying up, issuers could opt against testing a narrow window that remains ahead of an FOMC meeting next week, bankers said today (Friday), even if a variety of covered bond issues this week showed deals could still be done in the final days of the year.

Some Eu3bn of benchmark supply hit the market this week, comprising a Eu1.25bn three year issue for CIBC, a Eu500m four year from UniCredit Bank AG, and a Eu1.25bn 10 year for Intesa Sanpaolo.

Syndicate officials noted that each of this week’s new issues attracted sizeable demand, with bid-to-cover ratios ranging from 1.44 to 2, and that the leads of each deal found sufficient traction to tighten the spread.

“The main takeaway from these deals is that, in spite of the time of year, at the right price and for the right name trades can work and investors are still active,” said one. “New issue premiums were elevated compared to what we have seen in recent weeks, but they had to be to pull investors in, and these deals built some very strong books.”

Intesa’s new issue was described as the highlight of the week after attracting Eu2.5bn of orders, and syndicate officials said the deal, along with a successful tap of a 10 year Mediobanca issue yesterday (Thursday), showed the depth of demand at the long end.

Mediobanca leads Commerzbank, Mediobanca, Natixis and UniCredit reopened the Eu500m November 2025 deal with guidance of the 60bp area, for a maximum tap size of Eu250m, before fixing the spread at 60bp and the size at Eu250m. The original issue was priced at 48bp over mid-swaps on 3 November.

“Following Intesa’s very good result it was a sensible deal to do,” said a syndicate official away from the leads. “Although it is a little back of where they priced the original issue, that price still looks a good level.

“While there will be issuance across the curve in January, I would expect a notable increase in supply in the 10 year maturity and beyond, given how the market looks strong for deals in the long end after that back up in yields.”

Syndicate officials said that, while market conditions still look supportive, they are unsure whether issuers will test the market next week, as liquidity dries up.

“There are mixed views,” said one. “Deals have worked well, but next week is uncharted territory.

“It seems people are leaning towards thinking that it would be wiser to wait for January, rather than to go ahead.”

One syndicate official said that some issuers had been monitoring the market only to now put potential projects on hold and wait until the new year.

Another syndicate official noted that activity was slowing, adding that market participants will next week await the conclusion of a Federal Reserve meeting on Wednesday, at which an announcement on a rate hike is expected.

“With markets selling off towards the end of the week, limited client inquiries and liquidity drying up fairly quickly, as well as the FOMC meeting mid-week, my guess would be that we are done for the year in terms of benchmark supply.”