Intesa Sanpaolo, Aktia and Axa were able to push pricing tighter on euro benchmarks today (Tuesday), with the Italian national champion attracting over EUR2.8bn of demand to its EUR1bn five year OBG and the trio paying negligible to negative new issue premiums.

A syndicate banker involved in one of the trades said that although the global market backdrop was softer this morning, with Asian equity markets having fallen overnight, credit and covered bond markets remained firm, with today’s benchmarks further evidence of the asset class’s strength.

Unlike Aktia and Axa, Intesa Sanpaolo did not pre-announce its transaction yesterday (Monday). Leads Banca IMI, BNP Paribas, Deutsche, HSBC, UBS and UniCredit went out this morning with initial price thoughts of the mid-swaps plus 57bp area, and after around an hour and 10 minutes reported books above EUR1.5bn. An hour later, the guidance was set at 47bp-50bp, WPIR, and the size at EUR1bn on the back of more than EUR2.6bn of demand, and the final book at a re-offer of 47bp was over EUR2.8bn.

A banker at one of the leads said that the pricing represented a zero to negative new issue premium, putting fair value at around 50bp over.

“They’re very focused on cost more than anything else,” he said. “There was a little bit of scaling back on the 10bp revision, but reductions in tickets rather than drops.

“Intesa’s curve has held in very well,” he added, “and for investors it’s offering a decent spread for a rare Italian national champion in a part of the curve that attracts the broadest possible audience.”

Intesa Sanpaolo has not launched such a short-dated OBG benchmark since 2013, when it sold a EUR750m five year.

“We had a very strong and granular order book, with a good blend of asset managers and central banks and official institutions, “ said the lead banker. “Overall it was a very nice trade.”

The pricing was equivalent to around 120bp through BTPs, he added.

Intesa’s last euro benchmark was a EUR1bn seven year last July, which reopened the OBG market for a short time. This year Credito Emiliano, Banca MPS and most recently, on Monday of last week, UBI Banca have all sold successful Italian benchmarks.

Aktia Bank followed up on its mandate announcement yesterday with its EUR500m no-grow seven year issue this morning. Leads Crédit Agricole, LBBW, Swedbank and UniCredit went out with guidance of the mid-swaps plus 12bp area, with a lead syndicate banker saying that they might have gone out with the 11bp area had the market not been softer early today.

The leads reported books above EUR1bn after an hour and revised guidance to the 10bp area, and less than an hour after that set the pricing at 8bp on the back of more than EUR1.2bn of demand.

“As we were able to drive the pricing to 8bp there was basically no NIP,” said the lead banker. “After all, this is a covered bond from a scarce jurisdiction, a solid bank that people are familiar with but only comes perhaps once a year, and it is a EUR500m no-grow.

“We saw a lot of real money with sticky orders and the spread limits evaporated quite rapidly when we moved the pricing tighter.”

The only other Finnish benchmark this year was a EUR1.25bn 10 year for OP Mortgage Bank on 8 February. Aktia’s last euro benchmark was a EUR500m five year in May 2018.

Axa Bank Europe SCF attracted EUR875m of demand to its EUR500m no-grow 10 year, which was also announced yesterday. Leads BNP Paribas, Crédit Agricole, ING, SG and UniCredit went out with guidance of the 18bp over mid-swaps area and within an hour reported books above EUR750m. Guidance was subsequently revised to 15bp+/-1bp, WPIR, on the back of books above EUR1bn, before the re-offer was set at 14bp.

“We were safely oversubscribed and could therefore print at 14bp,” said a lead syndicate banker, “which was clearly the best possible outcome for this issuer in this market. The EUR500m no-grow nature of the deal helped us grind the price tighter so that at 14bp there was just 1bp of NIP.”

However, he noted that the final book size was around EUR875m, reflecting some price sensitivity in the order book.

The issuer’s last euro benchmark issuance was a EUR1.25bn dual-tranche, seven and 15 year deal in April 2018.

NordLB Luxembourg Covered Bond Bank is expected to launch its first euro benchmark since February 2017 tomorrow (Wednesday), after the announcement of a EUR500m no-grow five year lettres de gage publiques mandate today. DZ, Goldman Sachs, ING, NordLB and UnICredit are joint leads.

The issuer’s last euro benchmark was a EUR500m four and a half year in February 2017, while it sold a $650m (EUR523m) three year in February 2018. According to comparables circulated by the leads, the August 2023 paper was quoted at 14bp over, mid, and the issuer’s June 2023s at 18bp.

Moody’s on Monday of last week (18 February) put the Aa3 rating of NordLB Luxembourg’s lettres de gage publiques on review for upgrade, from direction uncertain, on the back of an expected improvement in parent NordLB’s capital position. The covered bonds of another NordLB subsidiary, Deutsche Hypothekenbank, benefited likewise, and it sold a EUR625m 10 year mortgage Pfandbrief yesterday.