Danske attracted some Eu1.6bn of orders to a Eu1bn five year covered bond today (Monday), with bankers describing the demand as impressive given the deal’s mixed collateral. Sparebanken Vest is set to launch a Eu500m seven year tomorrow, with other issuers also eyeing the market.

Danske’s deal was issued out of the Danish issuer’s C (combined) pool, which is backed by a mix of Norwegian and Swedish mortgages and by both commercial and residential mortgages. The pool has been earmarked for more frequent issuance since changes implemented by Danske last year.

Danske Bank leads Barclays, Crédit Agricole, Danske, RBC and Santander launched the five year issue with guidance of the 1bp over mid-swaps area this morning, before revising guidance to the minus 1bp area and fixing the size at Eu1bn with books above Eu1.5bn. The spread was later fixed at minus 2bp, with books approaching Eu1.6bn.

“It’s a very good result,” said a syndicate banker at one of the leads, “especially considering that this deal is not for everyone, because it is backed by a mix of both commercial and residential mortgages and collateral from two different countries.

“For the book to peak at around Eu1.6bn is therefore a strong outcome, and another step towards establishing this pool.”

The deal is Danske’s first euro benchmark covered bond since last March, when it issued a Eu1bn five year, also out of the C pool. The March 2021 deal was priced at 16bp over mid-swaps, and seen trading at around minus 5bp, mid, this morning. Bankers said this implied today’s new issue offered a concession of around 2bp.

“I think it’s also noteworthy that Danske priced that very similar trade almost 20bp wider this time last year,” added the lead syndicate banker. “I think that tells you that the market is currently very keen for assets outside the ECB purchase programme, which offer more value to investors.”

The lead banker added that the spread of the new issue was “competitive” versus the prices that Danske would have been able to achieve in Nordic markets.

Issuers from various jurisdictions are said to be monitoring the euro covered bond market and preparing deals for potential execution this week, and bankers are confident the pace of supply will increase substantially from the last two weeks, when Eu3.75bn of new benchmark supply was sold across three deals – including Crédit Agricole’s Eu2.5bn three trancher.

“This week will be busier, as we have more names out of blackout and quite a few are ready to issue or in discussions about potential deals,” said a syndicate banker. “The Nordics are the first to report, but I think there will be a mix of names that follow.

Sparebanken Vest Boligkreditt announced a mandate this afternoon for a Eu500m no-grow seven year issue, via leads Barclays, Credit Suisse, Nordea and UniCredit. The deal is expected tomorrow.

The deal will be the Norwegian issuer’s first euro benchmark covered bond since last February, when it sold a Eu500m six year issue.