Covered bond issuance is set to resume next week after a temporary pause, with a fall in bank shares today (Friday) expected to be only a side issue for the asset class. RLB Oberösterreich is expected to sell a euro debut, while medium maturities are an option once again.

After ANZ New Zealand sold a Eu1bn seven year covered bond on Tuesday, no further benchmark euro supply emerged this week, as many market participants were attending ECBC/Euromoney events in Düsseldorf on Wednesday and Thursday. Bankers expect market activity to pick up once again next week.

“The calendar looks clear, and there were no doubt many useful meetings and conversations this week that could lead to one or the other issuer come to the market,” said one.

Financial stocks were hit today by fresh concerns over Deutsche Bank, after it emerged that the US Department of Justice is seeking a $14bn settlement from the German bank – whose shares fell 8% in early trading. However, bankers said covered bond issuance is unlikely to be affected even if the impact continues to be felt across the banking sector next week.

“It’s a bit more of a side issue for covereds, and is probably more relevant for the senior market, where I think issuance could be challenging at the start of the week,” said a syndicate banker.

Bankers also said that any issuers that come to the market might potentially offer a greater diversity of maturities – with ANZ NZ’s seven year being the first new benchmark in the euro market to have a maturity of less than 10 years since 18 July. The New Zealand issuer’s deal came after a back-up in yields that lifted the seven year swap rate more firmly into positive territory, and bankers said that – depending on an issuer’s credit quality and the spread they would offer – positive yielding seven and eight year issuance is now back on the table for certain jurisdictions.

“ANZ NZ got a really impressive result – taking over Eu1.7bn of orders to what has been one of the trickier jurisdictions,” said a syndicate banker. “That shows how keen investors are for a bit of variety in terms of tenor.”

Raiffeisenlandesbank Oberösterreich is expected to come to the market with its first euro benchmark covered bond next week, having completed a series of investor meetings yesterday (Thursday).

A syndicate official at one of leads BNP Paribas, DZ Bank, Erste, LBBW and Raiffeisen Bank International said the deal will probably be launched early next week, but said a decision had not yet been made on its exact maturity. When mandating the roadshow, the Austrian issuer communicated that it would be targeting a deal with a medium-to-long maturity.

Ålandsbanken announced a mandate on Tuesday for investor meetings on Wednesday and Thursday of next week (21-22 September), ahead of potential Eu250m covered bond with a maturity of five to seven years. Commerzbank and SEB have the mandate. A syndicate banker at one of the leads said the deal will probably be launched around the end of the month.

The Finnish issuer’s last euro covered bond was a Eu250m five year in May 2015, which was quoted pre-announcement at minus 4bp, mid, according to the lead syndicate banker.

The deal will be launched out of Ålandsbanken’s Finnish cover pool, with the issuer also having a Swedish pool.

Singapore’s DBS Bank could also enter the euro covered bond market this month, and will on Monday go on the road ahead of a potential mid-term maturity covered bond that would be its first benchmark issue in the currency. Deutsche Bank, JP Morgan, Société Générale and UniCredit have the mandate.

Bank of Queensland is also in the pipeline, having been on a roadshow for its new covered bond programme (see separate article).