NN Bank is set to issue a debut Eu500m covered bond as soon as tomorrow (Wednesday), having today confirmed plans for a seven year CPT issue. Six deals last week made September the busiest month in the euro market since May, although third quarter supply was half that of Q2.

Nationale-Nederlanden Bank (NN Bank) completed a European roadshow marketing the Eu500m no-grow conditional pass-through (CPT) issue yesterday, and subsequently announced that the deal is expected to be launched as early as tomorrow. It then announced a mandate this (Tuesday) afternoon for a seven year issue, via leads ABN Amro, BNP Paribas, LBBW and Rabobank.

Syndicate bankers at the leads cited as comparables ABN Amro January 2024s at minus 15bp, mid, and January 2026s at minus 14bp, Aegon May 2023s at minus 3bp and De Volksbank May 2027s at 2bp.

The Dutch bank’s new Eu5bn covered bond programme was established last month and has been assigned an expected AAA rating by S&P.

NN Bank’s deal is set to be the first euro benchmark covered bond of October, following a quiet start to the week. A public holiday in Germany today (Tuesday) was deemed at least partly responsible for the lack of issuance, while the market was also absorbing the implications of Catalan independence moves.

The hiatus comes after a late September rush of supply, with six benchmarks launched between Monday and Thursday of last week for an aggregate Eu3.75bn.

Across the whole of last month euro benchmark covered bond supply totalled Eu10.25bn, including taps and a Eu500m FRN issued by Nykredit on 5 September. This is up on Eu5.75bn of issuance in September 2016 and makes last month the busiest month in the euro market since May, when Eu15.75bn was issued.

September’s supply made up the majority of the Eu15.5bn of euro benchmark covered bond issuance in the third quarter, after modest supply of Eu2.25bn and Eu3bn in July and August, respectively. Despite finishing on a high, third quarter issuance was therefore exactly half of the Eu31bn issued in the second quarter.

Year-to-date euro benchmark supply now stands at Eu93.2bn, down from Eu108.95bn as of the end of the third quarter in 2016.

“2017 is currently closest comparable with 2014, when Eu90.7bn was issued in the first nine months of the year,” said Maureen Schuller, head of financials research at ING. “Total euro benchmark supply in that year was Eu118bn.

“This is just a touch below our Eu120bn supply estimate for 2017.”

Issuance activity is expected to pick up after today’s public holiday, but bankers said blackout periods will limit supply over the coming weeks.

National Bank of Greece (see separate article), ASB Finance Limited, Caixa Económica Montepio Geral and Sp Mortgage Bank all have euro benchmark covered bonds in the pipeline, but NBG, ASB Finance Limited and Montepio only begun roadshows this week while Sp Mortgage Bank will market their deal later this month.