Long dated euro issuance was in vogue today (Wednesday) as ABN Amro printed the largest single-tranche euro benchmark in a year, and CaixaBank and CFF secured punchy spreads, albeit the French upon more limited demand. Sterling supply continued, and Westpac and Cariparma are due in euros.

The euro covered bond market was opened by a Eu1bn seven year issue for LBBW yesterday (Tuesday), but the trio of diverse issuers hit longer maturities today, capitalising on a market awash with liquidity after last year’s negative net supply and amid heavy January redemptions.

“Unsurprisingly, we have many issuers moving quickly to use the highly supportive market and print at what are very attractive spread levels,” said a syndicate banker, “particularly at the long end.”

Following a mandate announcement yesterday morning, ABN Amro’s 15 year euro benchmark issue was this morning launched by leads ABN Amro, Credit Suisse, Danske, LBBW and SG with guidance of the mid-swaps plus 5bp area.

After one hour and 15 minutes, the leads announced that books had exceeded Eu1.75bn, excluding joint lead manager interest. Guidance was subsequently revised to the 3bp area on the back of more than Eu2bn of orders, before the spread was ultimately fixed at 2bp and the size at Eu2bn with books in excess of Eu2.5bn.

“It is the deal of the day,” said a syndicate banker away from the leads.

The transaction is the largest single tranche euro covered bond since 4 January 2017, when ABN Amro sold a Eu2bn 15 year as part of a dual-tranche offering and DNB Boligkreditt sold a five year of the same size. ABN Amro’s dual-tranche deal last January, which also comprised a Eu250m 20 year, was the Dutch bank’s last new benchmark covered bond issue – although the 20 year piece was increased to Eu2.25bn in two taps later last year.

Both ABN’s previous long-dated trades were seen trading at around minus 3bp, mid, and bankers said fair value for today’s new issue was therefore around this level, implying the deal was priced with a new issue premium of around 5bp.

CaixaBank this morning launched a dual-tranche cédulas hipotecarias offering comprising a new 10 year euro benchmark tranche and a benchmark tap of an outstanding Eu375m July 2032 issue.

The new issue was launched with guidance of the 25bp over mid-swaps area and the tap with guidance of the 35bp area. The spreads were later fixed at 22bp and 32bp, respectively, and the sizes at Eu1bn and Eu375m – taking the July 2032 issue to a new size of Eu750m – upon a combined book of Eu1.75bn.

“It’s a good trade, getting good spreads and duration for the issuer, and was comfortably oversubscribed,” said a syndicate banker at one of the leads.

CaixaBank, Commerzbank, Natixis, UniCredit and UBS were bookrunners.

Bankers away from the deal said the new 10 year issue offered a concession of around 5bp, seeing CaixaBank January 2027s at around 15bp-16bp, mid. The Eu375m July 2032 issue, which was issued last July, was seen trading at around 30bp-31bp, implying the tap paid a concession of 1bp-2bp.

The new issue comes exactly one year after CaixaBank’s last euro benchmark cédulas, a Eu1.5bn 10 year sold on 3 January 2017. It is the first euro benchmark issue from Spain since April, with a Eu1bn 10 year issue for Banco Sabadell on 19 April the only other benchmark cédulas issued last year.

Many Spanish issuers have been focussed on TLAC/MREL-eligible issuance at the expense of covered bond funding, and overall peripheral supply was limited last year after peripheral banks took a sizeable share of the ECB’s TLTRO II funding, reducing their funding needs. Spanish issuance is therefore expected to be modest once again this year.

“No doubt the lack of Spanish supply supported demand for today’s deal,” said a syndicate banker away from the leads. “If you’re in the market for Spanish paper, CaixaBank is a good name to start the year with.”

Compagnie de Financement Foncier (CFF) leads Deutsche, DZ, Natixis, Santander and UBS launched the French issuer’s 10 year with guidance of the mid-swaps minus 5bp area this morning, following a mandate announcement yesterday.

After three hours, the leads announced that orders had exceeded Eu1.1bn, with guidance unchanged. The spread was ultimately fixed at minus 7bp and the size at Eu1bn with the book over Eu1.1bn, including Eu75m JLM interest.

Bankers away from the leads suggested that the deal had progressed relatively slowly and attracted more limited demand because it was the most expensive deal of the day and the only one with a negative spread, but they noted it still offered an appropriate new issue premium.

CFF issued Eu4.75bn of benchmark covered bonds last year across four deals, albeit none in the 10 year part of the curve. Bankers said the most appropriate comparables are CFF September 2026s, seen at around minus 11bp, mid, and April 2031s, at around minus 6bp, suggesting the spread of today’s deal incorporated around 3bp of new issue premium.

“You can say the deal was only Eu25m or so oversubscribed, but they clearly went for size and they got the size, at a good level,” said a syndicate banker.

Crédit Agricole Cariparma announced this morning that it has mandated Banca IMI, CaixaBank, Crédit Agricole and Natixis to lead a Eu500m no-grow 20 year obbligazioni bancarie garantite (OBG) issue. The deal will be launched tomorrow subject to market conditions, according to bankers at the leads.

The deal will be the first new benchmark 20 year covered bond since Cariparma’s parent Crédit Agricole issued a Eu500m 20 year in January 2017, as part of a three-tranche issue, now seen trading at 3bp, mid. Cariparma September 2031s, the Italian subsidiary’s longest dated outstanding OBGs, were seen at 20bp, mid, today.

Cariparma was the last Italian issuer to sell a benchmark OBG, having issued a Eu750m long eight year on 4 December.

Westpac announced a mandate today for a euro benchmark dual-tranche, seven and 15 year covered bond issue, expected tomorrow.

Following a £1.25bn five year FRN for Barclays yesterday, which was priced at 22bp over three month Libor, compatriot Lloyds and Canada’s Bank of Nova Scotia hit the sterling market on the second day of 2018 business.

Barclays, HSBC, Lloyds and RBC launched Lloyds’ three year FRN with guidance of the three month Libor plus 20bp area this morning. The spread was later fixed at 16bp and the size at £1.25bn (Eu1.4bn) on the back of over £2bn of orders, excluding JLM interest.

The new issue is Lloyds’ first benchmark covered bond since last January, when it sold a £1bn three year FRN.

Following a mandate announcement yesterday, Bank of Nova Scotia and its leads Barclays, Credit Suisse and NatWest Markets priced a £550m five year FRN at 23bp over three month Libor today.

The deal is Bank of Nova Scotia’s first benchmark covered bond in the sterling market since September 2016.