UBI Banca attracted over EUR2.25bn of orders to a EUR500m no-grow long six year covered bond today (Monday) and ultimately paid a modest new issue premium of 5bp after starting “on the safe side”. The Mortgage Society of Finland has meanwhile joined FCDQ in the roadshow calendar.

The Italian entered the market this morning with initial guidance of the 80bp over mid-swaps area for its EUR500m September 2025 deal via leads Barclays, Commerzbank, Deutsche, SG and UniCredit. The pricing was moved to 70bp in one step and demand ultimately totalled more than EUR2.25bn.

Syndicate bankers away from the leads were complementary about the trade. One said that the final result was a clear success, but noted that the initial pricing had incorporated a pick-up of some 15bp over fair value, suggesting “they were really going on the safe side”.

A lead syndicate banker agreed that the final new issue premium was around 5bp.

“We had a very, very strong response,” he said. “It was a shame it was only a EUR500m no-grow.”

The pricing was more than 100bp through BTPs, tighter versus the Italian sovereign than a EUR750m five year OBG for Credito Emiliano on 11 January that ended a six month hiatus in Italian issuance, which came at 95bp over mid-swaps and around 85bp through BTPs.

Although that trade signalled the market to be open for Italian credits, after the easing of long-standing political obstacles in Italy, only one other benchmark OBG followed Credem’s, a Banca MPS EUR1bn five year at 190bp over mid-swaps on 23 January. However, the lead syndicate banker said that UBI’s better result than Credem could prompt more Italian issuers to follow.

UBI’s deal was the only euro benchmark in the covered bond market today despite market conditions remaining as favourable as in recent weeks.

“I’m surprised we’re not seeing more issuers in the market making the most of it,” said the banker. “Deals are working and they’re working well.

“I’m sure others will take note of UBI’s success and we may see more.”

The only publicly announced euro covered bond mandates are for deals to potentially follow roadshows.

The Mortgage Society of Finland (Suomen Hypoteekkiyhdistys, or Hypo) today announced plans for a EUR300m seven year fixed rate covered bond after a roadshow starting next Monday. Danske, DZ and Swedbank have been mandated.

The Finnish issuer’s last new public euro covered bond was a EUR250m five year deal in April 2018.

Fédération des caisses Desjardins du Québec (FCDQ) will the following week, from 5 March, hold a roadshow for a possible euro benchmark with an intermediate maturity in senior and/or covered bond format. Barclays, Crédit Agricole and DZ have the mandate.

The Canadian issuer’s last euro benchmark was a EUR750m five year priced at 18bp over on 23 January.

Volksbank Wien is meanwhile this week roadshowing an inaugural euro benchmark, intermediate maturity covered bond.