Argenta Spaarbank entered the market a day later than expected today (Wednesday), but successfully issued a €500m seven year announced on Monday, while Crédit Mutuel took advantage of an improvement in market sentiment through yesterday to print a €2bn dual-tranche covered bond.

Argenta’s mandate was announced on Monday afternoon as Rabobank was wrapping up a highly successful €1.75bn 10 year benchmark, and the Belgian’s deal was expected yesterday. However, Russia’s decision late Monday to recognise as independent two Ukrainian regions all but shut down the primary market yesterday (Tuesday), with only KfW venturing into the euro market, issuing a €5bn three year trade.

“It’s been a rollercoaster,” said a syndicate banker. “Every time there’s one of these regional conflicts or security concerns, the market has extreme difficulty in gauging them – when there’s a crisis involving central banks and macroeconomics, even Covid, the market is much better at working out, this is good, this is bad.

“This means that in a situation like this, things can suddenly flip – if you look at yesterday, it started out as a disaster, and then it turned out to be quite an OK day.”

A banker at one of Argenta’s leads said the issuer and syndicate held a go/no-go call at around 8.45 CET yesterday morning and decided to hold off.

“While KfW was the right trade, as a three year from one of the major SSAs that should work fine,” he said, “in covered and senior, nobody really had the confidence to go ahead.

“But today’s opening was decent,” he added, “and everybody was rather bullish.”

Shortly after a go/no-go call this morning, leads Barclays, Belfius, LBBW and Natixis therefore opened books with initial guidance of the mid-swaps plus 10bp area for the €500m no-grow March 2029 mortgage Pandbrieven, expected rating triple-A. After around an hour and 50 minutes, they reported books above €750m, including €25m of joint lead manager interest, and after three hours, with the book above €800m, they set the spread at 7bp, and the final book good at re-offer was above €875m, including €25m JLM interest.

The lead banker said the 10bp area initial guidance represented a starting point 1bp wider than had been anticipated on Monday, while 11bp-12bp had been discussed yesterday morning before the decision to hold off.

“We saw a 1bp-2bp widening in the comps, so 10bp was very logical,” he said.

“We weren’t, of course, expecting a multi-billion euro book,” he added, “also because Argenta is a relatively new name in the market.”

The Belgian debuted a year ago, in February 2021, with a €500m 10 year, and followed this up with a €500m 20 year in September. The lead banker said some real money are still getting lines in place for the credit.

He noted that Argenta attracted €2bn of demand in September, but said that it is fast money and intermediaries that have dropped out.

“We could still move to the expected spread,” he said, “albeit on a smaller book, which was nevertheless of good quality.”

Crédit Mutuel Home Loan SFH hit the market this morning after having mandated banks yesterday. Leads BNP Paribas, CIC, Danske and UBS opened books with initial guidance of the 5bp area for a March 2027 euro benchmark, and the 11bp area for a March 2032 euro benchmark, expected ratings triple-A. After two hours and 15 minutes, the leads reported books above €2.4bn, excluding JLM interest, skewed towards the five year tranche. After three and a half hours, they revised guidance to 1bp+/-1bp, will price in range, for the five year and announced an expected size of €1.25bn-plus on the back of over €2.65bn of demand for that tranche, and set the spread on the 10 year at 8bp for a €500m print on the back of books above €695m. The five year was ultimately sized at €1.5bn and priced at plus 1bp on the back of €2.6bn of orders good at guidance, excluding JLM interest and pre-reconciliation.

A lead banker said that with the market proving open this morning and after the success of Rabobank on Monday, it was clear that a strong French name could launch such an issue, with the dual-tranche strategy again enabling size to be taken out.

“Five years is yet again the sweet spot,” he said. “We had hoped for a little bit more traction at the longer end, even if it turned out well.”

A banker away from the leads acknowledged that the outcome was successful overall, but noted that the CBPP3 ticket will have taken the 10 year over the line.

The lead banker said that while the re-offer spread of the five year was a “strong pricing outcome”, the 10 year would probably have come 1bp tighter on Monday.

Subject to market conditions, Hypo Noe is expected tomorrow with a €500m no-grow seven year Austrian mortgage Pfandbrief, following a mandate announcement today.

“We have a lot of geopolitical stuff going on here,” said a banker at one of its leads. “Were Russia to attack Ukraine, I’m not sure how this would affect the market, so let’s see tomorrow morning.”

According to pre-announcement comparables circulated by the leads, Hypo Noe September 2028s were quoted at plus 3bp, mid, while Erste Bank July 2028s and January 2030s were at minus 2bp and plus 1bp, respectively, and Bawag PSK October 2029s and September 2030s were at 0.5bp and 2bp.

Commerzbank, Crédit Agricole, Erste, LBBW and UniCredit are leads.

Banco BPM is planning an inaugural green OBG, today announcing a five year with an expected size of €500m mandated to green structuring advisor Crédit Agricole as well as Banca Akros, Commerzbank, Deutsche, Natixis and Santander.

A syndicate banker said issuers monitoring the market will be pragmatic and take the first available window.

“These windows open and shut at a moment’s notice,” he said. “You don’t know when the next will present itself, and if we are going be 3bp wider at the next one.

“Those issuers who have been looking at doing something in the first half are probably not going to look to do something now,” he added. “but if they have something in mind for Q1, they’ll just push ahead if they see some good deals in the market.”

Kommunalkredit Austria issued a €250m five year public sector covered bond today, with leads Commerzbank, Erste, Helaba and RBI pricing the sub-benchmark at mid-swaps plus 7bp.