A “shining” Eu1.5bn three year issue for BMO that drew Eu2.25bn of orders was considered a highlight of four euro benchmarks today (Thursday), while DNB built a Eu2bn book for a Eu1.5bn five year and deals from ABN Amro and La Banque Postale were deemed fine in tough conditions.

Today’s deals were launched amid volatility in other markets after stock market trading was suspended in China and following a temporary pause in euro issuance yesterday (Wednesday), when Germany and other European countries were closed for public holidays. Together with three benchmarks on Tuesday, today’s four issues took euro issuance for the new year to Eu8bn.

“While other markets look rocky it has been another good day for covereds, with no trade failing, all doing at least satisfactorily, and Bank of Montreal in particular shining,” said a syndicate official away from the deals. “For the second window running, the Canadian is the highlight of the day.”

Bank of Montreal leads BMO, Credit Suisse, Commerzbank and HSBC launched the three year issue with guidance of the 15bp over mid-swaps area, taking orders of Eu1bn in one hour, before re-offering the deal at 12bp. The book closed in excess of Eu2.25bn, with the final size set at Eu1.5bn (C$2.27bn).

“This deal is particularly impressive,” said another syndicate official away from the leads. “The size of the book clearly justifies the choice of tenor.”

Syndicate officials away from the leads suggested the deal came almost flat to the issuer’s secondary curve and offered only a slim premium versus other Canadian names, seeing BMO May 2019s trading at 13bp and CIBC December 2018s at 10bp, bid.

The deal comes after fellow Canadian Toronto-Dominion Bank on Tuesday priced a Eu1bn five year deal at 20bp, attracting Eu2bn of orders.

“Clearly there is a lot of interest in buying into the Canadians thanks to their LCR status and ECB repo eligibility, and the fact that their spreads are not distorted by CBPP3 and a real product of supply and demand, and therefore attractive,” said a syndicate official.

BMO sold three euro benchmark covered bonds last year, also tapping the sterling market with a £325m three year FRN in January.

DNB Boligkreditt leads Crédit Agricole, Deutsche, LBBW and UBS launched the Eu1.5bn five year Norwegian issue with IPTs of the 20bp over mid-swaps area, before moving to guidance of the 18bp area on the back of books of around Eu1.5bn. The re-offer was then fixed at 17bp with the books over Eu2bn.

Syndicate officials at and away from the leads said the deal offered a new issue premium of around 5bp, seeing DNB October 2020s at 12bp, bid.

“Given the softer market backdrop, that is a relatively small new issue premium,” said a lead syndicate official.

A syndicate official away from the leads said the deal was one of the better results of the day.

“You knew when it was announced this was going to be a good one, as it is what investors like – a medium term deal that isn’t ECB eligible,” he added.

DNB printed two benchmark covered bonds last year, a Eu1.25bn five year on 13 October and a $1.25bn five year in May.

ABN Amro leads ABN Amro, Barclays, BNP Paribas, Santander and UniCredit launched the Dutch 10 year issue with IPTs of the 12bp over mid-swaps area, then maintained that level for guidance before fixing the re-offer at 11bp and the size at Eu1.25bn.

“It is a fantastic result, given it was launched in a market that is very hard to read,” said a syndicate official at one of the leads. “Getting such a strong book for a 10 year, in a week when the 10 year mid-swap level has tightened by more than 15bp, is a very strong result.”

Some syndicate officials at and away from the leads said the deal offered a new issue premium of 6bp-8bp, seeing ABN Amro 2023 and 2024 paper all at minus 5bp, mid, and its 2030s at 17bp.

However, a syndicate official away from the leads said fair value for the deal was nearer to flat to mid-swaps based on bid levels, seeing the 2024s at minus 7bp and 2030s at 15bp.

“That’s more than we’ve seen in most other recent deals,” he said. “It’s not all that long ago since ABN did a 15 year in September and they’re going after the same investor base again, so maybe they would have got a better price if it wasn’t for that.

“But to be fair, getting a 10 year done in this environment is no mean feat.”

ABN Amro has sold only one benchmark covered bond in each of the last four years, with its last deal a Eu1.5bn 15 year in September.

La Banque Postale Home Loan SFH leads Commerzbank, LBBW, Santander and Société Générale priced the French Eu500m no-grow deal at 5bp over mid-swaps, after having announced the issue with IPTs of the 6bp area and maintained that level for guidance on the back of Eu600m of orders. The book closed with orders approaching Eu700m.

“We had hoped to go a little tighter with the price,” said a syndicate official at one of the leads. “However, given the way the market started today and the heavy traffic, with big deals taking up a lot of demand, this is a good result.”

The lead syndicate official saw fair value the new issue at around minus 2bp, citing La Banque Postale’s April 2022s at minus 3bp, mid, and September 2020s at minus 6bp.

La Banque Postale has issued one benchmark covered bond each year since making its public debut in 2013, with its last deal a Eu500m seven year in April 2015.

Syndicate officials said that more issuance could hit the market tomorrow (Friday), in spite of the announcement of non-farm payrolls in the US, as the market is performing well while others were closed.

“I think it bodes well that when other markets are struggling, the euro covered bond market is very much open and offering attractive funding for issuers,” said a syndicate official. “With that in mind, I wouldn’t be surprised to see more deals tomorrow.”