National Bank of Canada (NBC) launched a Eu750m seven year covered bond today (Thursday) after Federal Reserve chair Janet Yellen allayed US interest rate fears yesterday, paving the way for an increase in primary market activity. Cariparma has meanwhile mandated an OBG roadshow.

Market participants had been eagerly awaiting the outcome of the FOMC meeting and, although flagging a December rate increase, Yellen talked down the likelihood of further rises and yields fell in the wake of her comments.

Bankers this morning anticipated a reopening of the primary market and in the covered bond space National Bank of Canada moved first, announcing a seven year euro benchmark via BNP Paribas, Commerzbank, Lloyds, NBC and UBS. The deal is only the third euro benchmark in the past two weeks, after Raiffeisenlandesbank Oberösterreich (RLB OÖ) sold a Eu500m 10 year on Tuesday and ANZ NZ had on Tuesday of last week issued a Eu1bn seven year.

NBC went out with initial guidance of the 6bp over mid-swaps area, then revised guidance to the 4bp area for a Eu750m (C$1.1bn) deal size after having taken over Eu1.25bn of orders. The deal was ultimately re-offered at 2bp over with the books above Eu1.4bn.

Syndicate bankers away from the deal said that it had gone very well, putting the new issue premium at almost flat to NBC’s outstandings. One compared it to the success of other recent non-CBPP3 eligible benchmarks, which have come in shorter maturities than the 10 years that has been the dominant maturity for CBPP3-eligible issuance.

“The initial NIP was 5bp-6bp, then they got very strong traction, and the final level was almost flattish to secondaries,” he said. “It’s mid-swaps positive, with a positive yield and a great name.”

He also noted both that the market was “easy” today and suggested that strong demand for RLB OÖ’s benchmark had shown just how desperate investors are for paper. Another agreed, noting that NBC had successfully achieved an “aggressive” result.

The deal is only the second post-summer euro benchmark of shorter than 10 years, with ANZ NZ’s seven year having been the other. After RLB OÖ’s 10 year deal bankers suggested that a shorter maturity would have been preferable after heavy supply at the long end and one said today that seven years is the preferred maturity.

The benchmark is NBC’s first euro issue since January 2015, when it sold a Eu1bn seven year, while its most recent benchmark was a $750m (C$988m) three year in April 2015.

Syndicate bankers said that no immediate follow-on supply is expected, but Italy’s Cariparma has mandated parent Crédit Agricole to arrange a roadshow starting next week, with an intermediate and/or long-dated euro benchmark to follow, subject to market conditions.

Its last benchmark covered bond was a Eu1bn short eight year in September 2015.