Further opportunistic euro issuance is expected next week, alongside deals already on the road, amid historically tight spreads and unseasonal demand, typified by a Eu1.5bn deal for DNB yesterday (Thursday) that pulled in over 100 investors and, according to DNB’s Thor Tellefsen, exceeded hopes.

Deutsche Hypothekenbank is expected to launch a debut Green Pfandbrief next week, following the completion of a European roadshow. Achmea Bank is currently marketing an inaugural Dutch registered conditional pass-through covered bond benchmark, with its roadshow to end on Wednesday.

Sparkasse Hannover and Wüstenrot Bausparkasse have also been on the road this week, on Wednesday and Thursday, respectively, ahead of expected sub-benchmark issues.

Bankers said that aside from these names, other banks are also considering launching opportunistic deals next week.

“There are still a few candidates considering some pre-funding next week,” said a syndicate banker. “I think next week will have more or less the same pattern as this week, with a handful of new deals.

“The key takeaways from this week are that even non-Eurozone trades worked well at historically tight levels. These deals show there is still huge liquidity available for issuers – we just have to convince them to get going.”

In particular, syndicate bankers highlighted the number of accounts participating in this week’s euro trades as evidence of high demand described as “unseasonal” by one.

On Tuesday Compagnie de Financement Foncier (CFF) and Skandinaviska Enskilda Banken (SEB) launched the first euro benchmark covered supply in two weeks, printing Eu500m 15 year and Eu750m 10 year issues, respectively.

CFF’s deal was priced at 8bp over mid-swaps with the final book standing at Eu2.55bn from over 100 investors. With the deal over five times covered, the oversubscription ratio is understood to be one of the highest on any euro benchmark covered bond this year. SEB’s deal was meanwhile priced at 5bp through mid-swaps, with the final book standing in excess of Eu1.3bn from 77 accounts.

“Later in the week, some markets begun to show signs of strain after heavy supply, but the primary covered bond market shows no such signs,” said a syndicate banker.

Despite being the tightest ever euro benchmark covered bond from Norway, DNB Boligkreditt’s seven year deal yesterday (Thursday) attracted Eu2bn of orders from over 100 investors, enabling the issuer to print a Eu1.5bn trade – only the second euro benchmark of that size since the summer break.

“Looking at yesterday’s seven year DNB deal, one can only remember the days of September when no one liked the market at minus 5bp and 50 investors carried Europe’s largest asset class – after Bunds, BTPs and OATs,” said a syndicate banker at one of DNB’s leads. “Now in November when DNB prints the tightest ever Norwegian covered, double the number turn up – including Asia – and pile in with Eu2bn demand for the Eu1.5bn deal.”

Leads BNP Paribas, DNB, NordLB and UBS priced the deal at 9bp through mid-swaps, inside initial guidance of the minus 5bp area. The previous record holder for tightest Norwegian benchmark spread was DNB Boligkreditt’s inaugural euro issue, which was priced at minus 4bp in 2007.

“We are very pleased with all aspects of the trade, and positively surprised, I must admit,” said Thor Tellefsen, head of long term funding at DNB. “This kind of very opportunistic trade is not something we often do, but we saw the levels getting tighter and tighter, while there was still good demand and a lot of successful transactions out there – so why not utilise it?”

He added that while DNB had been encouraged by the week’s previous euro deals, the issuer had a preference to print a larger trade.

“We were hoping to manage Eu1bn, and wondering if the approach would work for this size,” he said, “but as you can see from the deal, we were more than filled when it came to our size expectations and we were able to take Eu1.5bn.”

DNB Boligkreditt fulfilled its 2017 funding needs two months ago, Tellefsen said, and the new trade is pre-funding for next year.

Some syndicate bankers suggested the deal received strong demand because, despite being a Norwegian record, the spread looked attractive versus some core, CBPP3-eligible jurisdictions.

Tellefsen noted that DNB’s covered bond maturities had exceeded supply in 2017, adding that this had supported “natural demand” for the deal.

All three of the deals were trading inside re-offer this morning, CFF’s by 5bp, SEB’s by 2bp, and DNB Boligkreditt’s by 1bp.