A promising opportunity for pre-summer issuance may have passed, according to syndicate officials disappointed that issuers did not follow encouraging euro sales on Monday and take advantage of a period of relative stability, with next week expected to be more challenging amid blackouts and holidays.

The only benchmark euro-denominated covered bond issuance since the UK’s vote on 23 June to leave the EU came on Monday, when Commerzbank sold a twice-subscribed Eu750m eight year Pfandbrief, while MünchenerHyp tapped a Eu500m April 2026 issue by Eu250m.

After demand for Commerzbank’s deal exceeded expectations, many syndicate officials had expected other issuers to follow, but no benchmarks emerged in spite of relative stability and covered bond spreads in most jurisdictions retracing widening to reach pre-referendum levels.

“It is a pity, because it was a good window,” said a syndicate official at one of Commerzbank’s leads. “Commerzbank has performed well, trading 2bp tighter, and the market looks good for safe assets like covereds.

“Unfortunately, speaking to issuers and to our syndicate colleagues, it seems issuers are not willing to step in and don’t like the wider market picture. It makes sense.”

Another syndicate official said that market conditions look likely to deteriorate after the summer.

“I don’t get it,” he said. “I thought there would have been more. A lot of people are already well funded, and perhaps some are also sceptical about how good the market really is, and wondering how much of Commerzbank’s success was down to the ECB bid.

“But how much better do people expect the market to get? This uncertainty is going nowhere and I think there’s more downside than upside.”

Syndicate officials said new issuance could emerge next week, but that it looks more challenging, with an expected summer slowdown and a Bank of England meeting on Thursday having the potential to quieten markets.

They also noted that banks from France, Italy and the UK are among those entering blackout periods next week, while France will mark Bastille Day with a public holiday next Thursday.

“This week was a good opportunity,” said one. “That opportunity may have gone.

“Last year we had supply right through to the end of July, but I am not sure that is possible in the current situation.”

Some syndicate officials were optimistic, however, that further deals could be done at the start of the week.

“It’ll be quiet, but I don’t think we’re quite done,” said one. “With some more stability, maybe someone will take a punt.”

Bankers said that any new euro issuance will likely be focussed in maturities of eight years or longer, noting that covered bonds from many jurisdictions are trading at negative yields in shorter maturities following the renewed fall in yields.

Commerzbank’s new issue was priced with a coupon of 0.05%, the lowest ever for a benchmark covered bond with a maturity of eight years or longer.

Maureen Schuller, head of financials research at ING, noted that many jurisdictions have over 90% of outstanding euro benchmark covered bonds quoted at negative yields – including Sweden (98%), Canada (96%), Denmark (93%) and Belgium (91%).

“More issuers may ultimately also decide to follow Berlin Hyp’s example of printing a covered bond at a negative yield to maturity,” she said. “However, the negative yield reality in covered bonds may very well push issuance activity further down the liability structure where banks are still able to offer investors a positive yield to maturity.”