Four issuers played it safe in euros today (Tuesday), offering NIPs of some 5bp to hit a window of opportunity in size, with BNS and Commerzbank selling their largest euro benchmarks, and ANZ the shortest in almost two years, but some bankers said caution, though welcome, was being taken too far.

ANZ, BNS, CFF and Commerzbank raised €6bn in aggregate, hitting each maturity from three to six years, with the first euro benchmark issuance since Thursday, when CIBC sold a €2.5bn four year that was in turn the first such supply in over a week.

Bankers said that, with issuers have largely steered clear of the primary market amid the recent Ukraine-induced volatility, they were now keen to take advantage of a window of stability to get ahead.

“Everyone knows that the backlog is growing,” said a syndicate banker, “and so at some stage it’s probably better to just go, rather than suddenly find yourself relegated to the end of an ever-growing queue.

“That’s why in the end four issuers pulled the trigger on the same day.”

But although the market was widely viewed as being open today, there was a price to be paid. Bank of Nova Scotia (BNS, Scotiabank), for example, issued a €2bn (C$2.77bn) four year deal at mid-swaps plus 10bp, 4bp wider than where compatriot CIBC priced a €2.5bn four year on Thursday and 5bp wider than where its compatriot’s deal was quoted this morning, while tightening pricing only 2bp during launch.

A syndicate banker at one of BNS’s leads said that while its more frequent presence in covered and senior bond markets was a factor in the higher spread and lower demand, market conditions were less attractive than those enjoyed by CIBC.

“Today was the first day on which it made sense to move,” he said, “but we are operating in a different environment. Thursday was relatively peaceful in terms of market sentiment, but then Friday was odd and yesterday was messy.

“In order to make sure people are doing more than just looking at screens, but are also bothering to consider investing, you need to put something on the table. And this was very much the name of the game today.”

Indeed, Commerzbank took the rare step of announcing the final range for its €1.5bn five year mortgage Pfandbrief from the outset, going out with 4bp-6bp, “will price in range”, language, while in sterling Westpac went out with 45bp, “the number”, for a £700m four year Sonia-linked trade.

A banker away from Commerzbank’s leads said its approach appeared overly cautious, with fair value for the new issue at around mid-swaps minus 1bp to flat, and the guidance hence implying a new issue premium of 5bp-6bp – making it a “must-have”.

“Doing that didn’t seem very confident,” he said. “They clearly wanted to go for size, and it worked, but it was cheap.”

And while another banker welcomed the pragmatism being shown by issuers, he agreed that some were taking such an approach too far.

“It’s good to see that covered bonds are working,” he said, “and it’s good that people are doing trades that are sensible, i.e. in the front end. But I think people have gamed themselves into paying bigger spreads, because they’re worried about what everyone else is going to pay.

“Hopefully if they go continue to go well and perform then that bodes well, but we just don’t want the next guy whacking on a few more basis points, and the next guy whacking on a few more…”

Further supply is anticipated tomorrow (Wednesday), ahead of the latest ECB governing council meeting on Thursday.

Commerzbank leads Crédit Agricole, Commerzbank, Helaba, ING, LBBW and Natixis opened books with guidance of mid-swaps plus 4bp-6bp, will price in range, for the March 2027 euro benchmark-mortgage Pfandbrief, expected rating Aaa. After around an hour and 40 minutes, they reported books above €1.85bn, excluding joint lead manager interest, and set the spread at 4bp for an expected size of €1.25bn-€1.5bn. The deal was ultimately sized at €1.5bn on the back of books above €2.4bn, and the final book was more than €2.8bn, including €75m of JLM interest.

The deal is the largest single-tranche benchmark covered bond issued by Commerzbank since it began issuing benchmark Pfandbriefe in its own name in 2013 – it has only once before raised €1.5bn in one go, via a two tranche, five and 15 year trade in January 2019.

According to pre-announcement comparables circulated by the leads, Commerzbank December 2026s were quoted at minus 3bp, mid, and its August 2027s at minus 1.6bp. Commerzbank’s last euro benchmark was a €1bn 10 year priced at mid-swaps minus 1bp on 5 January.

BNS leads BNP Paribas, DZ, ING, Natixis and Scotiabank went out with initial guidance of the mid-swaps plus 12bp area for its March 2026 euro benchmark, expected ratings triple-A. After a little over an hour and a half, they reported books above €1bn, excluding joint lead manager interest, and after close to four hours, they set the final terms of 10bp for the €2bn size on the back of books in excess of €2.25bn, including €95m of JLM interest.

The lead banker noted that the deal is BNS’s largest euro benchmark.

“That is a brilliant achievement,” he said. “You just have to be modest in this market – it’s either price, or size – and, having decided to curb their ambitions on price, they achieved a sizeable trade.”

The Canadian’s euro benchmark comes after it sold a $2.25bn five year Reg S/144A deal last Wednesday, while it last tapped euros in January, for €1.25bn of long eight year funding as part of a dual-tranche trade also featuring a £1.3bn four year FRN.

Compagnie de Financement Foncier (CFF) leads ABN Amro, Barclays, Citi, Danske, DekaBank, Helaba, Natixis and UBS went out with initial guidance of the mid-swaps plus 10bp area for the March 2028 euro benchmark obligations foncières, expected ratings triple-A. Orders peaked above €1.6bn and the pricing was set at 6bp and the size at €1.25bn at 6bp.

CFF January 2028s were quoted at plus 1bp, mid, according to pre-announcement comparables circulated by the leads, while other French paper was generally quoted in the context of plus 0.5bp in the six year part of the curve. A lead syndicate banker put fair value at 1.5bp and bankers away from the leads put the new issue premium at 4bp-5bp.

The lead banker noted that compatriot Crédit Mutuel priced a €1.5bn five year at 1bp over mid-swaps on 23 February, ahead of a week-long hiatus in euro benchmark supply.

“We knew there were plenty of other deals in the market,” added the lead banker. “Putting a double-digit spread on it at the start wouldn’t have been our choice last week, but there you have it.

“The orders were fine, and rather than mumbling about pricing range and all that stuff, it was very clear that plus 6bp was the best outcome on pricing, and then we solved for size. The issuer was capped at €1.25bn, which was comfortably covered at the re-offer.”

He said some accounts also noted that the maturity was slightly longer than the current sweet-spot.

ANZ attracted peak orders above €3bn to its three year transaction, enabling leads ANZ, Credit Suisse, Deutsche and SG to size the new issue at €1.75bn and price it at 7bp, following IPTs of the 12bp area. A banker away from the leads put the new issue premium at 4bp.

ANZ’s three year issue is the shortest-dated euro benchmark since Canadian issuers sold three year paper in March and April 2020 in the wake of the Covid-19 crisis hitting financial markets. Its last euro benchmark was a €1.25bn four year in November 2018.

Westpac leads HSBC, NatWest, RBC and Westpac set the spread on a four year Sonia-linked sterling benchmark, expected rating triple-A, from the outset, going out with 45bp, the number, this morning. After an hour and 20 minutes, they reported books above £550m, excluding JLM interest, and after two hours and 20 minutes, books above £675m, and the deal was ultimately sized at £700m (€848m, A$1.25bn) on the back of over £725m of demand.

The last sterling floater was a £600m five year for Bank of Montreal last Wednesday, priced at plus 40bp, while the last Australian Sonia-linked deal was a £1.5bn December 2025 issue for National Australia Bank on 6 January, priced at 27bp.

Aareal Bank is expected soon with a four year Reg S dollar benchmark mortgage Pfandbrief, via Citi, Deutsche, Goldman Sachs, HSBC, NatWest and Nomura, following a mandate announcement today. The German issuer last tapped dollars in February 2021, with a $750m four year mortgage Pfandbrief, while the last Reg S-only dollar benchmark was a $750m three year for Deutsche Pfandbriefbank on 9 February, priced at 43bp over SOFR mid-swaps.