Sparebanken Sør Boligkreditt is set to issue a EUR500m five year covered bond tomorrow (Tuesday), having announced a mandate today for what will be the first euro benchmark in a week, in a market quietened by blackout periods and equity volatility.

Only two euro benchmark covered bonds have been issued this month and, after a much more active January, only one of these came last week – a EUR500m seven year Pfandbrief for Germany’s apoBank on Tuesday.

Bank reporting periods have been deemed partly responsible for the limited supply, while last week’s volatility in equity markets also persuaded some issuers to hold off on entering the market last week, according to syndicate bankers.

Sparebanken Sør Boligkreditt announced this morning that it has mandated Danske, DZ, LBBW, Nordea and UniCredit to lead manage the EUR500m no-grow issue. A syndicate banker at one of the leads said the deal will be launched tomorrow, subject to market conditions.

The deal will be the Norwegian issuer’s third euro benchmark covered bond, following a EUR500m five year debut in March 2016 and another EUR500m five year in May 2017.

Syndicate bankers at the leads saw Sparebanken Sør Boligkreditt May 2022s at minus 7bp, mid, pre-announcement. They also cited as comparables DNB Boligkreditt January 2023s at minus 10.5bp and April 2023s at minus 11.5bp, SpareBank 1 Boligkreditt March 2023s and Eika Boligkreditt April 2023s both at minus 9.5bp, and SR Bank Boligkreditt January 2023s at minus 8bp.

The deal will be the third euro benchmark covered bond from Norway since the turn of the year, following a EUR1.5bn five year issue for DNB Boligkreditt on 16 January and a EUR1bn seven year green issue for SpareBank 1 Boligkreditt on 23 January.