Issuance could pick up this week after only one euro benchmark last week, with markets looking more stable and Fédération des caisses Desjardins du Québec having mandated a five year expected tomorrow, while Landesbank Saar is set to follow Landesbank Berlin in sub-benchmarks.

The only euro benchmark last week was a €1.25bn seven year for SG SFH last Monday (24 January), with concerns about imminent conflict in Ukraine stoking uncertainty that was already elevated on the back of the inflation and interest rate outlook. Bankers also noted that the market was to some extent “exhausted” after heavy supply in the preceding weeks.

Stock markets were more stable today (Monday) and SBAB restarted senior supply with a successful €500m no-grow five year senior preferred green bond, and syndicate bankers were more positive about supply prospects in covered bonds.

“We expect an even more lively primary market,” said one, “because a lot of issuers decided to wait and watch today, as to how the markets will open with the new week, and they seem to be quite stable at the moment. Last week, we saw a lot of equity volatility, although it hasn’t affected the fixed income market that tremendously.

“So we expect the pipeline to be quite full for all asset classes including covered bonds, where there are two mandates for tomorrow (Tuesday). But it can obviously change quite fast.”

Fédération des caisses Desjardins du Québec (CCDJ) is planning a five year euro benchmark, with Commerzbank, Natixis, NatWest, RBC and SG as joint leads.

The Canadian’s deal will follow three totalling €5.75bn from its compatriots in the defensive five year part of the curve the week before last, including the biggest euro benchmark since 2006, a €2.75bn transaction for Bank of Montreal. BMO’s new issue and a €2bn 5.25 year were re-offered at 6bp over mid-swaps, while a €1bn (C$1.42bn) five year for NBC was sold at 5bp over.

CCDJ’s last euro benchmark was a €500m five year in March 2021.

Landesbank Berlin AG issued a €250m 10 year mortgage Pfandbrief today (Monday). Sole lead DekaBank priced the deal at the initial guidance of mid-swaps minus 3bp.

A banker said that while maturities longer than 10 years could be tough for tight products like covered bonds and SSAs, the market is still open out to 10 years, with higher yields helping demand.

Landesbank Saar is planning a €250m no-grow seven year public sector Pfandbrief via DekaBank, LBBW and UniCredit, according to a mandate announcement today.

According to pre-announcement comparables circulated by the leads, Landesbank Saar September 2030 and May 2031 €250m sub-benchmarks were quoted at plus 2bp and plus 3bp, mid, respectively, LBBW €750m July 2029s at minus 4.5bp, and Münchener Hypothekenbank February 2029s at minus 3bp.