Leeds Building Society is preparing to launch its second euro benchmark covered bond, announcing yesterday that it will hit the road next week ahead of a potential Eu500m issue. Uncertainty in the wake of the UK’s general election and its impact on Brexit negotiations are not expected to impact UK banks’ market access.

Leeds Building Society announced yesterday (Tuesday) afternoon that it has mandated Barclays, BNP Paribas, Natixis, Santander and UniCredit to arrange a series of investor meetings, after which a Eu500m no-grow covered bond with an intermediate maturity will follow subject to market conditions.

Leeds’ last benchmark covered bond was a Eu500m four year that was priced at 27bp over mid-swaps in April 2016, and seen trading at around 1bp, mid, today. The euro deal was its first benchmark in the currency, with the UK issuer having previously issued benchmarks in sterling.

The deal could be the first benchmark covered bond from the UK since the country’s general election last Thursday, which delivered an unexpected hung parliament as prime minister Theresa May’s Conservative government lost its majority. Although negotiations to form a coalition government are yet to conclude, bankers said the resulting uncertainty is unlikely to have a substantial impact on UK issuers’ access to the covered bond market.

“I think for a covered bond this is not a concern,” said a syndicate banker. “Before the Brexit vote, after the Brexit vote, and before this vote, we have had successful deals from the UK.”

Bankers noted that UK covered bond spreads had moved in line with the wider market since Thursday’s vote.

Leeds’ roadshow will commence on Monday and conclude next Wednesday (21 June), visiting Dusseldorf and/or Frankfurt, Munich, Vienna, Helsinki and/or Copenhagen, Amsterdam and Luxembourg.