Hypo Noe has opted for a six year maturity for its first benchmark since 2014, a Eu500m deal that is due tomorrow (Tuesday), on what bankers believe could be the best window for issuance this week, in light of the UK’s expected triggering of Article 50 on Wednesday and the quarter-end on Friday.

The new issue for Hypo Noe Gruppe Bank comes after the Austrian issuer completed a two week European roadshow on Friday, having flagged its intention to print a euro-denominated public sector covered bond with a six or eight year maturity. The roadshow was arranged by Commerzbank, DekaBank, Erste, Nykredit and UniCredit.

After its investor meetings, Hypo Noe then announced a mandate this morning for a Eu500m no-grow six year issue via the same banks. A syndicate banker at one of the leads said the deal is likely to be launched tomorrow, subject to market conditions.

The deal will be Hypo Noe’s first benchmark covered bond since September 2014, when it sold a Eu500m seven year mortgage-backed issue.

It will also be the first benchmark covered bond issued out of Austria to have a soft bullet structure. Hypo Noe amended the base prospectus for both its public sector and mortgage covered bond programmes last June to allow for soft bullet issuance, becoming the first Austrian issuer to do so.

Two benchmark Austrian covered bonds have been sold this year, a Eu750m 10 year mortgage issue for Erste on 10 January and a Eu500m 10 year public sector issue for Bawag PSK on 11 January.

Bankers suggested tomorrow may be the best window for covered bond issuance this week, because of the potential for wider market volatility after the UK government triggers Article 50 on Wednesday. A response from the European Commission is expected by the end of the week, and bankers said the direction of European markets could be affected by the tone and wording of this response.

They added that market activity may also be focussed towards the start of the week given that the end of the first quarter falls on Friday.

“Taking that into consideration, you’d expect issuers to come to the market sooner rather than later, but the market isn’t in such spectacular shape today,” said a syndicate banker. “That’s partly due to some spillover from the US on the back end of last week and Asia overnight, both on the failure of the Trump healthcare bill.

“That means people are not rushing into doing transactions today, with only a couple of corporate trades out there.”