Sparebanken Vest successfully debuted at the long end with a €750m 10 year today (Thursday) and SpaBol took €1.25bn of six year funding at a tight level, as the market again proved accommodating to new issuance, with BayernLB also pricing a twice-subscribed €500m no-grow eight year.

The two Norwegian issuers and BayernLB announced their plans yesterday (Wednesday), on a day when three trades totalling €4bn hit the market, bringing the week’s euro benchmark supply to €8.5bn and year-to-date issuance to €12.25bn – some 10% of the roughly €120bn forecast for the whole of 2022.

But despite yesterday seeing the first deal to fall short of expectations in the new year, today’s transactions showed the market to remain in fine fettle.

“It’s good to see that the market is so healthy that two Norwegians can do covered bond benchmarks in euros on the same day,” said a banker at one of the leads.

“It’s really encouraging.”

Sparebanken Vest Boligkreditt leads Danske, Deutsche, HSBC, LBBW, Natixis, NordLB and UniCredit opened books this morning with initial price thoughts of the mid-swaps plus 10bp area for the January 2032 euro benchmark issue, expected rating Aaa. After an hour and five minutes, they reported books above €1bn, excluding JLM interest. After an hour and 45 minutes, guidance was revised to plus 6bp+/-1bp, will price in range, on the back of an order book above €1.5bn, including €145m in JLM interest. The size was ultimately set at €750m and spread fixed at plus 5bp with an order book over €1.65bn, JLM interest unchanged, pre-reconciliation.

“We had a really good book right from the outset,” said a lead banker. “As soon as books opened, investors started pouring in, so it was quite clear early on that this trade would go well.”

The two Norwegians issuing on the same day was not a problem, he added, owing to SpaBol’s name recognition and shorter maturity.

“There was no cannibalisation,” he added. “You can almost see it as a dual-tranche, as many other trades have been this week, where you have Norwegian supply in the longer end and in the belly of the curve.”

The lead banker put fair value for Vest’s 10 year – its first euro benchmark in the maturity – at plus 3bp, implying a 2bp NIP.

“We went into this project wanting to make sure it looks attractive from the outside,” he said, “and hence the generous start compared to fair value. It’s their first 10 year, so it was also important to get things moving and get a slightly bigger size.”

SpareBank 1 Boligkreditt (SpaBol) leads BNP Paribas, Commerzbank, DZ and Swedbank went out this morning with initial guidance of the mid-swaps plus 4bp area for the January 2028 euro benchmark issue, expected rating Aaa. After two hours and 45 minutes, the spread was fixed at mid-swaps flat on the back of books in excess of €1.8bn, including €125m in JLM interest. The size was ultimately set at €1.25bn on the back of a final order book over €1.6bn, JLM interest unchanged.

“It was a smooth, elegant trade, in a very balanced covered bond market,” said a lead banker. “We printed a little more than we were planning in the morning, due to the high volume order book.”

Lead bankers saw the pricing as flat to fair value, with one saying that SpaBol had printed at a historically low level to core European covered bonds.

“That in itself is amazing,” he added. “The difference between all the issuers that have ECB support and those who do not is very little.”

BayernLB leads ABN Amro, BayernLB, Credit Agricole, DZ and Natixis this morning opened books with initial guidance of the mid-swaps flat area for the €500m no-grow May 2030 public sector Pfandbrief, expected rating Aaa, following a mandate announcement yesterday. After one hour 45 minutes, they reported books above €1bn, including €125m in joint lead manager interest. After two hours, the spread was fixed at minus 4bp on the back of books above €1.2bn, JLM interest unchanged. Books at allocation stood at €1.06bn good at re-offer.

A syndicate banker at one of the leads saw the pricing flat to fair value.

“It went very much according to proven patterns,” said a lead banker.

A banker away from leads noted BayernLB is one of the tightest German names.

“It is more of a product for hardcore Pfandbrief investors and eight years is a little short for investors who want longer and those who prefer five years and no more, even if it keeps most of the those in the seven year part of the curve,” he said, “so it’s completely understandable that the book wasn’t that big compared to the two Norwegian trades.

“But for practical purposes it’s still good,” he said, “and it was a very quick trade, so they should be happy.”