Møre Boligkreditt and Bausparkasse Wüstenrot achieved impressive sub-benchmark outcomes today (Tuesday) but saw drops upon final pricing, while a Sp Mortgage Bank €500m seven year deal was off recent highs, amid signs of investor selectivity ahead of Achmea and Caffil trades.

Well into a third consecutive week of heavy supply, the covered bond market again proved strong, noted a syndicate banker, who said the Norwegian and Austrian sub-benchmarks achieved “astonishing” results.

“And this was done after you had rumours and a risk-off in the market yesterday,” he added. “There is a big appetite for covered bonds, and a lot of money for issuers who are not that frequent.”

However, a €850m book for a €500m no-grow seven year for Finland’s Sp Mortgage Bank was at the bottom end of recent benchmark subscription levels, and its 1bp-2bp new issue premium off lows, while orders for Møre Boligkreditt’s €250m no-grow five year green debut and Bausparkasse Wüstenrot’s €300m no-grow seven year inaugural sub-benchmark fell significantly upon their final pricing iterations.

“It could be a sign that investors are getting a bit more selective after a huge wave of issuance,” said another syndicate banker, “and markets may be getting a bit more into risk-off since Monday, so maybe we should be careful with the upcoming transactions.”

These include benchmarks for Achmea and Caffil, which are expected as early as tomorrow (Wednesday), in what is expected to be another busy day in the euro market – subject to market conditions.

“Yesterday we had high volatility in the capital markets,” said a syndicate banker on one of the planned trades. “We are looking for a safer market, meaning not as volatile as it was yesterday.

“We will go out tomorrow as soon as we can in the morning, after looking at everything. If there is a disruption, then we would postpone it again for a day or more.”

Caffil is planning an eight year euro benchmark covered bond and a potential 20 to 25 year transaction. Should it issue a 25 year tranche, the trade would be the longest dated euro benchmark since January 2020, when Crédit Agricole Italia issued a €750m January 2045 OBG.

Crédit Agricole, Commerzbank, ING, Natixis and NordLB have the French mandate.

According to pre-announcement comparables circulated by the leads, Caffil social April 2029s were at minus 1.7bp, its green November 2029s at minus 0.8bp and its June 2030s at plus 1bp. Caffil June 2038s were at plus 1.5bp and February 2040s at 4.1bp, while recent Dutch 20 year paper was quoted around 4.5bp, and the curve between Crédit Agricole Italia’s January 2038s and January 2045s was worth 5bp.

Achmea Bank is planning an inaugural soft bullet, €500m no-grow 15 year transaction, according to a mandate announcement today. Investor calls were held today, with Barclays, Deutsche, DZ, HSBC, ING and Rabobank as leads.

The Dutch bank’s last issue was a €500m five year conditional pass-through covered bond in June 2020, and since then it has established a new soft bullet covered bond programme, like compatriots Aegon and NN Bank.

Kommunalkredit Austria has meanwhile updated on its sub-benchmark plans, choosing the seven year maturity for a €250m deal via DZ, Erste, Helaba and RBI. It had been considering a five or seven year maturity.

Sp Mortgage Bank hit the market today after a mandate announcement yesterday, with leads BNP Paribas, LBBW, Nordea and Santander this morning going out with initial guidance of the mid-swaps plus 6bp area for the €500m no-grow September 2028 issue, expected rating triple-A. After two hours and five minutes, they reported books over €800m, including €50m in joint lead manager interest. After three hours and 20 minutes, the spread was fixed at plus 3bp on the back of order books above €1bn, including unchanged JLM interest. The final order book was above €850m.

A lead syndicate banker said the deal had gone well in light of the developing market conditions. He said Finnish secondaries tend not to be clear when it comes to fair value, but put it in the context of 1bp-2bp, implying a 1bp-2bp new issue premium.

“Maybe we needed to pay up a bit,” he added, “but a fairly good outcome for an issuer which is not in the market very often.”

Having announced its green covered bond debut last week, Møre Boligkreditt leads LBBW, Santander and Swedbank opened books this morning with initial guidance of the mid-swaps plus 10bp area for the €250m no-grow September 2026 deal, expected rating Aaa. After an hour and 45 minutes, they reported books above €450m, including €20m in JLM interest. After two hours and 20 minutes, the spread was set at plus 6bp on the back of books above €550m, with JLM interest unchanged. Books above €350m were good at re-offer, with unchanged JLM.

A lead banker said the Norwegian issuer had achieved a very strong trade, with a better spread than expected this morning, and an “all-time” tight versus its bigger compatriots.

“If you take yourself back some years, when you saw €250m being printed, it could’ve easily been 20bp behind national champions,” he said. “Now, for most sub-benchmarks in Germany, we are nearly flat, but here in the Nordics we are definitely below 10bp, which is positive.”

He put fair value for the transaction at around plus 7bp, implying a zero to small negative new issue premium, while a banker away from the leads saw fair value at 6bp.

The lead banker noted that the deal attracted 40 accounts, making for a “solid” investor base for a sub-benchmark, particularly with the Norwegian name not benefitting from an ECB order.

Following investor calls on Thursday and Friday, Bausparkasse Wüstenrot leads Erste, LBBW, NordLB and UniCredit went out this morning with initial guidance of the mid-swaps plus 9bp area for the €300m no-grow September 2028 issue, with an expected triple-A rating. After an hour and five minutes, they reported books above €400m, excluding JLM interest. After one hour and 50 minutes, they revised guidance to plus 6bp +/-1bp, will price in range, on the back of books above €540m, including €55m in JLM interest. After two hours and 20 minutes, the spread was fixed at plus 5bp with the book above €575m, including unchanged JLM interest, good at guidance. The final book at re-offer was €450m, with unchanged JLM.

A lead syndicate banker put fair value at plus 4bp, implying a 1bp NIP.

“A very good trade for an inaugural issuer,” he said.