BPCE SFH kickstarted the busiest post-summer week yet with a strong €1bn long seven year deal today (Monday) that attracted some €1.8bn of orders at a negligible new issue premium, an outcome that bodes well for five mandated euro covered bonds that could hit the market this week.

Five new euro benchmarks have been launched in the three weeks since 17 August, but at least four are expected this week, which would make it the busiest since the week commencing 28 June, when four hit the market.

Syndicate bankers attributed the level of activity to the time of year, with all market participants returned and ready by now, and issuers choosing to move ahead of a European Central Bank governing council meeting on Thursday – even if little significant news is expected from Frankfurt.

“If we look at the market, rates look quite stable,” said a syndicate banker, “so good sentiment for covered bond supply. This week will be quite a busy one, which BPCE kicked off with a pretty successful seven year.”

BPCE leads ABN Amro, Deutsche, HSBC, Mediobanca, Natixis, Santander and Scotiabank opened books with initial price thoughts of the mid-swaps plus 6bp area for the October 2028 issue, rated Aaa/AAA (Moody’s/S&P). After two hours and 45 minutes, a book above €1.8bn, including €10m joint lead manager interest, was good at a re-offer level of plus 1bp and the deal was sized at €1bn.

“The books only shrunk by €400m,” said the syndicate banker, “and those might have been fast money investors. Based on a €1.8bn book, you can very solidly print €1bn.”

According to pre-announcement comparables circulated by the leads, BPCE March 2028s were quoted at 0.25bp, mid, while BPCE January 2029s were at 0.75bp. Syndicate bankers away from the leads put the fair value between 0.5bp and 1bp, implying a very low new issue premium, if any.

“It was a very successful trade,” said another syndicate banker.

“I think it was maybe a bit necessary to start a little wider than what we have seen in the past few trades,” he added, “given they were the first ones to come with a €1bn or bigger size.”

Previous post-summer deals have been €500m-€750m, with a seven year for Crédit Mutuel on 8 July the last to be for €1bn.

Today’s deal is BPCE SFH’s fourth of the year, with two of the previous ones having been dual-tranche transactions.

As many as three deals could hit the market tomorrow, which would make it the busiest day for euro benchmarks since 19 January, when four were launched.

HSBC Bank Canada was today taking indications of interest for a five year debut euro benchmark that it announced last Wednesday, having set a maximum €750m size after engaging with more than 75 investors in marketing last week. Pricing is expected tomorrow.

Prima Banka Slovensko has mandated Commerzbank, DZ and LBBW as joint lead managers for a €500m no-grow six year covered bond, which is expected tomorrow. The Slovak issuer’s only outstanding benchmark, a €500m October 2026 issue, was trading at mid-swaps plus 11.5bp, mid, according to pre-announcement comparables circulated by the leads.

And Aareal Bank has mandated a €500m no-grow seven year Pfandbrief to BayernLB, Commerzbank, Helaba, Natixis and UniCredit.

A syndicate banker suggested issuers and leads could err on the side of caution when it comes to pricing, given how busy the market will be.

Canada’s Equitable Bank could launch a three year sub-benchmark debut covered bond of €250m-€350m this week after marketing last week, while Austria’s Hypo Oberösterreich mandated its first green covered bond for this week, a €250m no-grow seven year.