Axa Home Loan SFH is set to launch its second obligations de financement de l’habitat benchmark as early as tomorrow (Tuesday), after announcing the mandate for the €500m no-grow 10 year today, although the euro covered bond pipeline is otherwise thin.

BNP Paribas, Crédit Agricole, ING, Natixis and UniCredit will lead manage the French issuer’s deal.

Axa Home Loan SFH issued its inaugural euro benchmark in June, a €1bn eight year that attracted €1.5bn of demand and was priced at mid-swaps plus 7bp.

According to pre-announcement comparables circulated by the leads, that July 2027 paper was today quoted at 5bp-5.5bp over, mid, Crédit Agricole January 2029s at 3.5bp, CRH October 2029s at 4.5bp-5bp, and Société Générale July 2029s at 3bp.

A syndicate banker at one of the leads said he expects demand for the deal to be strong, with investors keen to buy ahead of an expected tightening in November once the ECB re-launches its asset purchase programme.

“We don’t expect massive new issuance before year-end and this still represents decent value versus government bonds and SSAs,” he added. “It’s a good buy for investors at the moment.”

No other euro benchmarks are slated for launch this week, despite syndicate bankers saying that the market remains open – as evinced by issuance in other asset classes – and a trio of issuers having executed a variety of successful transactions last week. Banca MPS, CRH and SR-Boligkreditt all hit the market on Tuesday, although primary market activity was then stifled by a German holiday on Thursday. Market participants have also suggested that some issuers have already completed their funding or 2019, while the European reporting season is expected to constrain issuance in the coming weeks.

However, Sparebanken Sør Boligkreditt is this week roadshowing its first green covered bond, a €500m no-grow five to seven year deal, of which proceeds will be earmarked for refinancing green residential mortgages.