Another four new euro benchmarks hit the market today (Tuesday), with issuers ready to pay double-digit new issue premiums to secure even modest success, although some found the going tougher than others in the jostle for position in a crowded primary market.

Today’s four trades totalling €2.5bn followed four euro benchmark covered bonds yesterday (Monday) for an aggregate €2.75bn – a surge in supply after only one such issue last week, a €500m long four year for Aareal last Tuesday (14 June).

“There was a lack of issuance last week, with just two deals across asset classes,” said a syndicate banker, “so it was always clear there was a big pipeline to be executed. We had some stability on Friday and then a stable open yesterday and a positive tone through the day, so the floodgates have just opened.”

Yesterday, a Bayerische Landesbank €500m no-grow 10 year inaugural green rail public sector covered bond attracted a final order book of €886m, with pricing tightened 2bp to 8bp over mid-swaps, the tight end of guidance and at a relatively low new issue premium of around 7bp, showing that for certain names and products, even successful long-dated issuance is feasible.

However, other new issues were somewhat swamped by the deluge of supply and priced in the middle of guidance on the back of only modestly oversubscribed books, despite offering NIPs of around 10bp. A €500m no-grow three-and-a-half year deal for South Korea’s Kookmin Bank was priced at 27bp on the back of a final book above €650m, excluding joint lead manager interest, while a €500m no-grow February 2028 soft bullet debut for the Netherlands’ Van Lanschot Kempen was priced at 20bp on the back of around €700m of demand, excluding JLMs. Bankers said Kookmin had a limited window to approach the market, while Van Lanschot Kempen hit the market after having announced its mandate on 10 June.

“We’re glad to have gotten the deal done in the end,” said a banker at one of the Dutch issuer’s leads, “but we are, of course, seeing investors continue to be extremely price sensitive, and across deals that movement from start to finish is often not there.”

Issuers entering the market today faced a similar situation.

“Trades are getting done,” said another syndicate banker, “but they’re mostly coming in pretty defensive maturities of five up to maybe seven years. This is where issuers can get some size done, particularly if they want to do more than €500m, and if they don’t want to pay the credit curve, which seems to be steeper and steeper.

“It’s clearly more of an investor’s market,” he added. “They have more of a say in terms of where we land things, and it looks to be something in the context of 10bp of NIP versus the mid side of the secondary curve – even if you can challenge how relevant secondaries are.”

Today, Bank of New Zealand and HSBC SFH France were each able to price €750m deals on the back of €1bn-plus books and tighten pricing 2bp from initial guidance on their five and six year benchmarks, respectively. BNZ came in from guidance of the 30bp over mid-swaps area to 28bp, although a syndicate banker away from the leads noted that the book dropped to above €750m upon the move.

“But that was a really good trade,” he said. “They’ve still been able to print size and tighten, for what isn’t the most common name.”

HSBC SFH’s pricing was tightened from the 22bp area to 20bp, and the deal and its spread was cited as contributing to a five year euro benchmark for Virgin Money (via issuer Clydesdale Bank plc) being unmoved from initial guidance and only just subscribed. The UK issuer’s €500m deal was priced at 24bp on the back of a €500m book, including €90m of joint lead manager interest.

A lead banker said that the competing supply today had stymied better demand and pricing for Virgin’s trade, but was sanguine about the outcome.

“Maybe with the repricing we’ve been seeing in covereds at the moment, in a couple of months’ time they’ll be very happy with the level today,” he said.

Raiffeisenlandesbank Oberösterreich was meanwhile able to tighten pricing on a €500m no-grow seven year mortgage covered bond from 21bp+/-2bp, will price in range, to 19bp on the back of a final €840m order book.

Further euro benchmark mandates are in the pipeline and syndicate bankers expect issuers to continue to move to tap the primary market. While both CBPP3-eligble and ineligible names have hit the market this week, a potential cut in the Eurosystem order for deals settling next month is said to have accelerated some issuers’ plans, with one banker pointing at a €1.25bn long five year deal for Credit Mutuel Home Loan SFH yesterday that was tightened from 14bp to 12bp on the back of a peak €1.6bn-plus book.

“Clearly they were able to take advantage of the 30% order size still being there,” he said, “which makes it a lot easier to print in size.”

Hamburg Commercial Bank (HCOB) is expected tomorrow (Wednesday) with a €500m no-grow five year mortgage Pfandbrief, rated Aa1, following a mandate announcement today. ABN Amro, BNP Paribas, Commerzbank, NordLB and UniCredit are leads.

PKO Bank Hipoteczny is planning a three year debut euro benchmark green covered bond, rated Aa1, via UniCredit (global coordinator), Erste, LBBW, PKO Bank Polski, Santander and UniCredit. Launch, subject to market conditions, is expected after investor calls that began today.