Axa Bank Europe SCF and LF Hypotek are set to sell euro benchmarks tomorrow (Tuesday), having today mandated five and seven year benchmarks, respectively, after Toronto-Dominion got the covered bond week off to a slow start with a £250m long five year fixed rate issue.

Axa Bank Europe SCF mandated BNP Paribas and Crédit Agricole as global coordinators with joint bookrunners Commerzbank, ING, SG and UniCredit for its five year obligations foncières backed by Belgian and French mortgage collateral.

The issuer sold a Eu250m 15 year deal on 17 January and its last benchmark was a Eu750m seven year in March 2016. That benchmark was its first since 2012 and it has in the meantime been adapting its cover pool, which previously comprised own-originated Belgian RMBS.

A syndicate banker at one of its leads said that Axa’s March 2023s were seen flat to mid-swaps before the new issue was announced, with its November 2020s at minus 11bp and its 15 year at plus 26bp. Other French and Belgian paper in the five year part of the curve was seen at between 6bp and 11bp through.

The deal will be the first French benchmark in the five year part of the curve since a Eu750m long five year for BNP Paribas Home Loan SFH in January 2016 and the first French straight five year since a CFF Eu1.25bn five year in October 2015.

Länsförsäkringar Hypotek (LF Hypotek) is targeting the seven year part of the curve with a Eu500m no-grow deal via Commerzbank, NatWest, Nordea, SEB and UBS. LF Hypotek’s last benchmark was a Eu500m seven year in April 2016.

Fellow Swede Stadshypotek sold a Eu500m seven year benchmark at 1bp through mid-swaps on 14 February, while Finland’s OP Mortgage Bank issued a Eu1bn seven year at 4bp through on Friday.

Syndicate bankers said the market should be receptive to the two new benchmarks, citing an ongoing lack of supply and supportive conditions.

“It may not look like it from equities and there has been some volatility in govvies, but the market is in good shape,” said one, noting that Iceland’s Landsbankinn had attracted over Eu700m of demand to a Eu300m five year at 130bp over mid-swaps today, paying a new issue premium of only around 10bp. “That is a positive message given that Icelandic names haven’t always gone as planned, even if it is a different animal to covered.”

Any euro issuance this week is expected before the conclusion to a European Central Bank meeting on Thursday and US non-farm payrolls on Friday.

Toronto-Dominion Bank (TD) priced a £250m long five year deal today that was smaller and wider against Gilts than two similar issues sold in January.

Leads Barclays, Lloyds and TD priced the December 2021 deal at 68bp over Gilts, in the middle of initial price thoughts, and sized the transaction at £250m on the back of a book of around £290m. In the same maturity, RBC sold a £500m issue at 63bp over on 4 January and CBA a £350m five year at 67bp over the following day.

A syndicate banker away from the leads said that the ultimate pricing was fair and the size and price reflected the state of the five year fixed rate sterling sector, which he noted in SSAs had been oversupplied.