Axa Bank Europe SCF sold a Eu250m 15 year obligations foncières today (Tuesday), its first public covered bond since supportive amendments to the French legal framework. With the market otherwise empty, Aareal mandated its first euro benchmark since 2014, a Eu500m long five year expected tomorrow.

Today’s sub-benchmark deal from Axa Bank Europe SCF, the French issuing entity of Belgium’s Axa Bank Europe, was the only covered bond in the market today, following a livelier Monday, on which three euro benchmarks were sold.

“This is probably going to be the pattern for the coming weeks,” said a syndicate banker. “Deals deals, deals, and then quieter moments, depending more on the whims of issuers or political headlines rather than anything fundamental to the market.”

At least one euro benchmark is expected tomorrow, with Aareal having announced a mandate this (Tuesday) afternoon for a Eu500m no-grow long five year mortgage Pfandbrief. A syndicate banker at one of leads Commerzbank, DekaBank, DZ, LBBW and UniCredit said the deal could be launched tomorrow, subject to market conditions.

The new issue will be Aareal’s first euro benchmark since September 2014. The German bank’s last benchmark Pfandbrief came in March 2015, when it sold a $500m April 2019 issue.

Tobias Engel, director, treasury, head of capital markets, Aareal Bank, last summer told The CBR that the issuer had been relative quiet as a result of being engaged in the integration of acquisitions Corealcredit and WestImmo.

On Thursday, Moody’s assigned a new Aaa rating to the mortgage covered bonds of Aareal, which are also rated AAA by Fitch.

With the market otherwise quiet, Axa Bank Europe SCF’s leads BNP Paribas and Natixis launched the 15 year obligations foncières with guidance of the 25bp area over mid-swaps this morning. The deal was later re-offered at 25bp with books in excess of Eu270m, and pays a coupon of 1.25%.

Bankers said it was difficult to estimate fair value for the new issue, given a relative shortage of comparable 15 year paper, but that the sub-benchmark-sized deal offered an attractive pick-up versus recent long dated French benchmark supply.

Since November 2014, Axa has added French residential home loans originated by Axa Banque in France to its previously exclusively Belgian cover pool, making it a rare multi-jurisdictional residential mortgage/home loan cover pool. The issuer’s obligations foncières (OF) were originally secured by triple-A rated RMBS notes backed by Belgian mortgage loans, which currently make up around 90% of the collateral.

The deal is Axa’s first publicly issued covered bond since France’s covered bond framework was amended in November, with Axa one of the main beneficiaries of the changes.

The amendments aligned the previously distinct regulatory regimes of SCFs and sociétés de financement de l’habitat (SFHs) – which issue obligations à l’habitat. Among the changes implemented are a granting of permission for SCFs to use secured loans on the asset side –only SFH vehicles had previously been able to do so – and the removal of caps on mortgage promissory notes and guaranteed home loans.