Andbank (Andorra Banc Agricol Reig) looks set to launch the first covered bond from Andorra, having announced plans for a potential sub-benchmark residential mortgage-backed issue after a roadshow starting next week.

JP Morgan arranged the new Eu500m programme and will arrange the investor meetings, which will begin on Monday.

The principality does not have covered bond legislation and, as such, Andbank’s deal will be a structured covered bond.

The covered bonds will be backed by mortgage loans secured on properties situated in Andorra. As of 30 April, the cover pool comprised Eu177m of mortgages.

The private bank is rated BBB (stable) by Fitch and its covered bonds are expected to be rated BBB+ by the rating agency. Andorra is rated BBB (positive).

The bank, which operates internationally, had total assets of Eu4.995bn at end-2016.