CFF “read the market well” to print what was deemed the best deal of today (Monday), a EUR1bn 10 year covered bond, as UOB sold a EUR500m five year. Five deals are mandated for tomorrow, including the first post-summer peripheral benchmark and a sterling reopener.

Since the euro covered bond market reopened on 21 August, the majority of post-summer supply has come from a select few core European jurisdictions, but today’s deal for Singapore’s UOB and mandates for the likes of Deutsche Bank’s Spanish unit and the UK’s Lloyds will see the market get off to a more diverse start in what is widely expected to be a busy September.

“There has been a focus on senior unsecured market over the last two weeks, but the covered bond market is now getting into gear,” added a syndicate banker. “There is going to be something for everyone.

“These aren’t the kind of deals that will get in each others’ way, and it will be interesting to see how they are all taken up, if any patterns emerge. I would expect everything to go fairly well, as I don’t see any reason why things would be worse after a good day today.”

The new issue for Compagnie de Financement Foncier (CFF) is its first since plans to integrate parent Crédit Foncier de France into the BPCE group were announced in June, with the issuer set to issue less going forward and focus on public sector rather than mixed collateral.

Leads Banca IMI, DekaBank, Danske, Natixis, NatWest and Santander launched the 10 year issue with guidance of the 12bp area today. The spread was ultimately fixed at 8bp and the size at EUR1bn with the books over EUR1.4bn.

The French issuer’s deal comes after a EUR500m seven year issue for compatriot Crédit Agricole was only marginally oversubscribed on Wednesday. The next day, Société Générale printed a more convincing, defensively priced EUR750m five year issue upon a book of over EUR1.8bn.

“I think CFF was probably the best deal of the day,” said a syndicate banker away from the leads. “Crédit Agricole’s deal last week was a bit of a weak point, but CFF adjusted for that by offering a higher new issue premium to start, and then it was a good 4bp squeeze to cut that premium in half.

“It was a really good reading of the market after last week’s trades.”

Bankers said the deal paid a final premium of 4bp, based on the issuer’s curve.

UOB leads HSBC, NordLB, SG, UBS and UOB launched the EUR500m no-grow issue this morning with guidance of the mid-swaps plus 10bp area. The spread was later set directly at 7bp with books above EUR800m.

“You can’t complain with a 7bp print down from a 10bp start,” said a syndicate banker away from the leads.

The deal is UOB’s second euro benchmark covered bond of the year, following a EUR500m seven year issue in January, and the issuer’s fourth euro benchmark overall.

‘Something for everyone’ on Tuesday

Deutsche Bank SAE announced this morning that it has mandated BBVA, CaixaBank, Crédit Agricole, Deutsche and Lloyds as lead managers for a long five year euro benchmark cédulas hipotecarias.

No benchmark covered bonds have emerged from the periphery since 18 July, when Banco BPM rounded off a wave of Italian supply. The new issue will be the first benchmark covered bond issued out of Spain since 7 June, when Cajamar printed a EUR500m five year.

The deal will be the Deutsche unit’s first benchmark cédulas since December 2016.

Bankers said that even though peripheral covered bond supply has been absent, recent senior unsecured deals from the periphery had demonstrated that demand is there for deals from southern Europe. On Wednesday Spain’s Banco de Sabadell sold a EUR750m long five year senior preferred deal on the back of EUR1bn of orders.

NIBC is also expected in the market tomorrow after having this morning announced a mandate for a EUR500m no-grow 10 year covered bond, via leads ABN Amro, ING, LBBW, NIBC Bank and UniCredit and co-lead NordLB.

Making a swift return to the market, Germany’s Aareal Bank announced a mandate today for a EUR500m no-grow July 2023 mortgage Pfandbrief, via DekaBank, Deutsche, Goldman Sachs, HSBC and UniCredit.

The deal will come just two weeks after Aareal sold a EUR500m July 2025 issue on 21 August – one of two deals that reopened the euro market after the summer break.

Commerzbank announced a mandate this morning for a minimum EUR250m tap of its EUR500m April 2028. Commerzbank, HSBC, Natixis, NordLB and SEB are the leads. The original deal was priced at minus 7bp in April.

Lloyds Bank is set to reopen the sterling covered bond market tomorrow, after having this afternoon announced a mandate for a three year benchmark FRN, via leads Lloyds, HSBC, RBC and TD.

The deal will be the first benchmark covered bond linked to SONIA rather than Libor. The last benchmark sterling covered bond came on 6 June.