Yorkshire Building Society (YBS) is set to launch the first euro benchmark of November as early as tomorrow (Tuesday), a €500m no-grow seven year social covered bond debut offering rare UK supply, while DBS is planning a four year inaugural Sonia-linked deal.

YBS has mandated Danske, HSBC, LBBW, Natixis and Nomura for its first social bond, according to a mandate announcement today (Monday), and the deal can be expected as soon as tomorrow, according to a lead banker.

“There has not been much from the UK,” he said, “and even if there are a few investors who don’t really buy the UK now, it’s going to be a really interesting trade – it’s a social bond, after all, and that tends to get attention from investors who might not be chasing everything out there.”

The new issue will be the first euro benchmark from a UK financial institution since Coventry Building Society in July issued a €750m seven year benchmark. YBS’s last euro benchmark was a €500m seven year in October 2020.

The use of proceeds of YBS’s social financing framework include providing access to essential finance and financing services to niche populations underserved by high street lenders, such as first-time buyers, the self-employed, contractors, older people in or heading into retirement, and social housing. A second party opinion has been provided by S&P Global, which confirms the framework’s alignment with ICMA’s Social Bond Principles and deems YBS’s overall use of proceeds commitments to be “strong”.

The framework also allows for unsecured and RMBS issuance.

According to pre-announcement comparables circulated by leads, the YBS October 2027s issued a year ago were trading at plus 8bp, mid, and its May 2024s at plus 6bp, while Coventry Building Society June 2026s were at plus 9bp and July 2027s at plus 11bp, and Nationwide May 2041s at plus 9.5bp.

DBS Bank is planning an inaugural four year Sonia-linked sterling covered bond via DBS, HSBC, NAB and RBC, according to an announcement today. The Singaporean issuer ended a near four year absence from the covered bond market only last month, with a €750m five year on 19 October.

The last sterling trade to hit the market was a Commonwealth Bank of Australia £400m (€467m, SGD729m) seven year Sonia-linked trade on 20 October.

The new mandates come after the covered bond market finally took a breather last week, with no new benchmark issuance for the first time since the week commencing 9 August. A syndicate banker said the lack of supply was partly because of issuers looking elsewhere and rates volatility, rather than anything inherent to covered bonds.

“I don’t think it is because people feel that the market is bad,” he said. “It’s only natural to just sit down for a week and then look at the market again.”

UniCredit AG (HVB) nevertheless on Wednesday tapped its outstanding January 2032 mortgage Pfandbrief for €250m, raising the issue size from €1.25bn to €1.5bn. The tap was priced at minus 1bp, following guidance of mid-swaps flat plus or minus 1bp, and the final book good at re-offer was €438m, including €100m of joint lead manager interest.

“It was actually quite good and very quick, probably one of the quickest I have seen for quite a while,” said a lead banker. “Again, there are some investors who are not really a fan of taps, but the pricing was in line with secondaries, and you had orders coming in very quickly.”