CCDJ, CFF and Sparebanken Vest hit the market with a further three new issues today (Thursday) and paid no new issue premiums, and although demand and pricing eased versus highs seen among six deals earlier this week, bankers played down any suggestions this pointed to a downturn.

Nine euro benchmarks have been launched this week, making it the busiest for primary market activity since mid-January, with €7bn of supply in aggregate.

Whereas deals earlier in the week were as much as five-plus times covered and achieved new issue premiums as tight as minus 2bp, the execution of today’s new issues was in comparison more restrained. However, today’s average subscription ratio was still around two-and-half, not much lower than an average of around three for the six preceding deals, while new issue premiums were also kept to around zero.

The easing in demand is in part down to increasingly tighter re-offer levels, according to a syndicate banker, who said that this, coupled with investors now already having a sizeable chunk of covered bonds on their books, caused some to shy away from participating in today’s offerings.

“Vest and CCDJ are also smaller, less frequent names,” he said, “and they’re coming to the market at tighter levels, so it’s fair to say some accounts were done for this week.”

Deals launched by Bawag, Eika Boligkreditt and NN Bank yesterday (Wednesday) were trading marginally tighter, by around half a basis point, he said, seeing this as a positive takeaway for the asset class.

“It’s nothing major, but it’s not like they’ve widened out,” he said, “and today, depending on the name, they’ve moved 4bp-5bp from guidance to final pricing, which is still very healthy.”

Another syndicate banker said opportunistic investors were likely the most put off by tightening spreads, highlighting a UniCredit HVB €1bn five year Pfandbrief priced at 7bp last week versus a Sparebanken Vest Boligkreditt €500m long five year today at 6bp.

“They’re a much smaller name,” he added, “and they’re doing a five year at 6bp – things have tightened quite fast. So I don’t think it’s any lack of demand – the fast money guys just probably did not put as big orders in these particular deals.”

Another banker said the zero new issue premiums achieved today show that the market continues to be bulletproof, despite there being a little less “fizz” than the first three days of the week.

“This is to be expected at the end of one of the busiest weeks we’ve seen for a while,” he added.

After announcing its mandate this morning, Sparebanken Vest Boligkreditt leads Danske, DekaBank, Deutsche and Santander went out with guidance of the mid-swaps plus 9bp area for a €500m will-not-grow long five year transaction. After an initial update reported books over €900m, including €50m JLM interest, guidance was later revised to 6bp+/-1bp, WPIR, on the back of over €1.25bn, including €50m JLM interest, pre-reconciliation. It was ultimately priced at 6bp.

The new issue is the third Norwegian euro benchmark this week, after a €1bn green seven year from SpareBank 1 Boligkreditt (SpaBol) on Tuesday and a €500m no-grow long seven year from Eika Boligkreditt yesterday, both of which were priced at 7bp.

A syndicate banker away from the leads said the guidance may have been deemed aggressive given it is a smaller name than SpaBol, which set guidance on Tuesday for its trade at 12bp.

“Spreads have tightened substantially in a very short timeframe,” he said, “so while they were aggressive, they were right to do so as they still managed to print with a really tight spread versus their curve.”

Although the deal could have been optically more attractive by starting with double-digit guidance, according to a lead banker, the issuer did not necessarily need a €2bn-plus book.

“It’s only a €500m trade,” he said, “and at the top, we had €1.25bn in the book, which is perfectly fine for a deal of this size.

“By starting with 9bp,” he added, “we didn’t ramp the spread in by 5bp as we have seen some do, so it’s more like the classic tightening strategy.”

After announcing its mandate yesterday (Wednesday), Fédération des caisses Desjardins du Québec (FCDQ, ticker CCDJ) leads Barclays, LBBW, RBC, Société Générale and UBS went out with guidance of the mid-swaps plus 12bp area for a €500m no-grow five year issue. After around 30 minutes, books were reported as being over €1bn, excluding JLM interest, and after around an hour and 30 minutes, the spread was set at 9bp, on the back of over €1.8bn of demand, including €100m JLM interest.

According to pre-announcement comparables circulated by the leads, CCDJ May 2023 and January 2024 paper was at 6.5bp and 8bp, respectively. RBC September 2025s and TD June 2025s were at 7bp and 7.5bp, respectively.

It is one of CCDJ’s largest books for a euro benchmark covered bond, and a syndicate banker away from the leads said he was impressed by the demand.

“It’s really nice,” he said, “because we haven’t seen a Canadian trade for quite some time now.”

Another away from the leads said the relative novelty of a Canadian euro benchmark was welcomed.

“There’s always been good demand for not only non-Eurozone, but non-European bonds,” he said, “so it ticks a lot of boxes.”

Compagnie de Financement Foncier (CFF) leads Commerzbank, HSBC, LBBW, Natixis, Santander, Scotiabank and UniCredit went out with guidance of the mid-swaps plus 11bp area this morning for a 10 year euro benchmark-sized obligations foncières after having announced the mandate yesterday.

After around an hour, books were reported as being over €1bn, excluding JLM interest, and after around two hours and 45 minutes, the guidance was revised to 8bp+/-1bp, WPIR, on the back of over €1.9bn demand, including €50m JLM interest. It was ultimately priced at 7bp and sized at €1.25bn. The final book was over €1.6bn, good at re-offer.

A lead banker said €1.25bn size a decent size for CFF. He saw fair value at 7bp based on the issuer’s own curve.

“Books peaked over €1.9bn and they paid no new issue premium,” he said, “so it was a great trade – the proof is in the pudding.”

The primary market will take a breather tomorrow (Friday), according to syndicate bankers, as no new euro benchmarks are expected.

“We’ve had the pipeline that we knew of now,” said one. “There’s one or two Nordic names that are looking, perhaps for next week, but it’s not imminent.”

All deals launched this week have performed relatively well in the secondary market, said another lead banker, adding that a one to two day hiatus for the primary market would not be unwarranted.

“It wouldn’t be a bad thing to let things sink in and pick things up next week,” he added.