Dual-tranche covered bonds for Caffil and Helaba attracted peak €4.9bn and €3.1bn order books, respectively, today (Tuesday), with the shorter pieces of each seen inside fair value, and Crédit Agricole Italia and BPCE are due with similarly structured trades tomorrow alongside HCOB fives.

Today’s benchmarks were launched after mandate announcements yesterday (Monday), when a UniCredit €1bn 11 year Pfandbrief kicked off what is expected to be a busier week than last week’s New Year reopening, and supply of €4.5bn yesterday and today already surpasses the €3.75bn of issuance last week.

Landesbank Hessen-Thüringen (Helaba) leads Commerzbank, Crédit Agricole, DZ, Erste, Helaba, Natixis and UniCredit went out this morning with initial price thoughts of the mid-swaps flat area for a 5.5 year mortgage Pfandbrief, and the plus 6bp area for a 15 year public sector Pfandbrief. After initial updates put books at €2.5bn for the 5.5 year and €1.1bn for the 15 year, the tranches were ultimately fixed at €1.25bn at minus 5bp for the shorter tranche on the back of some €3.6bn of orders, and €1bn at plus 3bp for the longer piece on the back of some €1.3bn of demand.

“Helaba had a very quick bookbuild and a very large trade,” said a syndicate banker away from the leads. “It’s probably the tightest of the German names, so they should be more than happy with €2.25bn.

“€1bn in 15 years is a very strong outcome for Helaba. We have seen very good interest in the five year segment for some time, and even for the name, minus 5bp is a very tight price.”

A lead banker agreed the bias in demand towards the 5.5 year tranche reflected the trend on recent shorter dated deals, and put fair value at minus 5bp-4bp, implying a zero to negative new issue premium. He put fair value for the 15 year at plus 2bp, implying a NIP of 1bp.

Caisse Française de Financement Local (Caffil) leads BNP Paribas, Commerzbank, Crédit Agricole, DZ and SG this morning opened books with initial guidance of the mid-swaps plus 5bp area for a €750m no-grow January 2032 issue, and mid-swaps plus 10bp area for a €500m no-grow January 2042 issue, both rated Aaa by Moody’s, AA+ by S&P, and AAA by DBRS.

After an hour, they reported combined books above €2bn, and after an hour and 40 minutes, the spreads were fixed at mid-swaps flat for the 10 year with an order book over €2bn, including €205m in joint lead manager interest, and plus 6bp for the 20 year on the back of an order book over €1.1bn, including €40m in JLM interest. The ultimate book sizes at re-offer were over €1.6bn, JLM interest unchanged, for the 10 year, and over €900m, JLM interest unchanged, for the 20 year.

“It shows that the 10 year segment remains a very good maturity, with a move of 5bp,” said a syndicate banker away from the leads. “And I’m sure they could have printed more if they wanted to.

“The 20 years is always a little bit of a special segment,” he added. “It’s very, very long, but as we have seen earlier in the year, as well as last year, with the rates environment where it is, it makes sense also for the yield buyers to buy in.”

A lead banker put fair value at plus 1bp for 10 year, implying a negative NIP, and at plus 6bp for the 20 year, implying pricing flat to fair value.

Today’s two deals are expected to be followed by dual-tranche trades for BPCE SFH and Crédit Agricole Italia that were announced today. Although this week’s issuers of dual-tranche transactions have all used the format before, they were joined by Erste Bank last week – when it opened the market on Tuesday with €750m 6.5 and 15 year tranches – and a syndicate banker said the strategy was proving successful.

“Today’s deals are another testament to the dual tranche format,” he said, “to help issuers take size out of the market without compromising on the size of the individual tranche, so you can basically spread out demand.”

Another syndicate banker said the strategy was particularly apt in today’s rate environment, saying that the back-up in yields has boosted demand for longer dated bonds, making offerings of such transactions alongside shorter maturities more feasible.

Heavy supply from banks as they increasingly return to wholesale funding markets is likely to see the format embraced more widely, he added.

“You’re issuing a lot,” said the banker, “but trying to mitigate folks feeling like you’re in the market every week.

“I wouldn’t be surprised to see at some point issuers trying to put multi-currency issues together, doing euros at the same time as dollars or sterling, or something along those lines.”

Crédit Agricole Italia is planning a 10 year tranche with an expected €750m size and a 20 year tranche with an expected €500m size. Crédit Agricole, IMI-Intesa Sanpaolo, Natixis, RBI, SEB and UniCredit have the mandate.

The last OBG to hit the market was a €750m seven year from Banca Carige in October 2021 that attracted over €1.3bn of orders, priced at 57bp over mid-swaps, making it the widest euro benchmark covered bond in over two years.

BPCE SFH is planning a five and 10 year euro benchmark transaction via Crédit Agricole, DZ, JP Morgan, Natixis, Santander, Scotiabank, Swedbank and UniCredit.

According to comparables circulated by the leads, BPCE November 2026s were quoted at minus 2.5bp, mid, and its September 2027s at minus 1.5bp, while BPCE May 2031s were quoted at plus 1bp, its June 2031s at mid-swaps flat, and Crédit Agricole February 2032s at plus 1bp.

Hamburg Commercial Bank AG (HCOB) is planning a €500m no-grow five year Hypothekenpfandbrief, expected rating Aa1, with Citi, Commerzbank, Crédit Agricole, LBBW and UniCredit as leads, according to a mandate announcement today.

According to pre-announcement comparables circulated by the leads, HCOB November 2028s were quoted at plus 1bp, mid, while Deutsche Pfandbriefbank (pbb) August 2026s were quoted at minus 3.5bp. Aareal Bank February 2030s issued last week were quoted at minus 2bp.