Oversea-Chinese Banking Corporation (OCBC) could issue a debut covered bond as soon as next week, following a roadshow beginning on Thursday. Issuance this week is expected to get off to a slow start as Germany marks the Carnival holiday period, but conditions are still seen as favourable.

Singapore’s OCBC announced a mandate on Friday afternoon for a European roadshow ahead of its debut covered bond issue, which will be denominated in either euros or US dollars, have a mid-term maturity, and be in Reg S format.

The roadshow will start on Thursday and although a formal end-date has not yet been set, a banker at one of the leads Barclays, BNP Paribas, Crédit Agricole and JP Morgan said the intention is for the roadshow to last around five days. The banker said the issuer will be ready to issue the deal next week upon the conclusion of the roadshow.

OCBC’s debut has been awaited since the issuer in November established a $10bn (Eu9.4bn, SGD14bn) global covered bond programme, and speculation that a deal was imminent increased after it joined the Covered Bond Label initiative earlier this month.

It will become the third covered bond issuer from Singapore, following DBS and United Overseas Bank (UOB), which issued a dual-tranche, US$500m three year and Eu500m five year covered bond on Wednesday. The dollar tranche was priced at 45bp over mid-swaps and the euro tranche at 10bp.

Including UOB’s deal, Eu2bn of euro-denominated benchmark supply was sold across three deals last week, and bankers expect similarly modest volumes this week, with no deals yet announced for immediate execution.

“It’s been a fairly sleepy start to the week, with only a couple of corporates out today and little movement to report in financials,” said a syndicate banker. “With parts of Germany still on holiday celebrating Carnival, and with the month-end falling on Tuesday, it may be that things continue in that vein and don’t really get going again until mid-week.

“These factors are not show-stoppers, but they at least offer people an excuse for not doing anything until Wednesday, if they want one.”

Nevertheless, an issuer that is said to have been monitoring the market since last week is seen as a candidate to announce a euro benchmark trade later this week, according to syndicate bankers, and as the European reporting season nears its end it is expected that more will join the pipeline.

“There is one firm candidate that we hope could emerge as the week progresses, but it is too early to say for sure,” said syndicate banker. “Either way, this remains an issuer’s market and I would expect someone at least to move in and to take advantage.”

Photo: a float at Cologne Carnival, 2016; Credit: Marco Verch/Flickr