Short-dated trades from Desjardins and HVB showed the market to be open for successful trades despite the time of year and €200bn-plus of supply, and Bankinter is set to issue a rare peripheral benchmark, following the announcement today (Monday) of a five-and-a-half year cédulas hipotecarias.

The Spanish bank has mandated Bankinter, Deutsche, HSBC, Natixis and Santander for the new issue, which will be the first from Spain since a €3.5bn dual-tranche Santander trade on 31 August and only the fourth Spanish euro benchmark of the year.

Bankinter’s last euro benchmark cédulas issue was a €500m 10 year in January 2018.

Fédération des caisses Desjardins du Québec (ticker CCDJ) leads Commerzbank, ING, LBBW, SG and TD opened books this morning for the Canadian’s euro benchmark-sized November 2024 transaction, expected ratings Aaa/AAA (Moody’s/Fitch), with guidance of the mid-swaps plus 15bp area. After around two hours and 10 minutes, they reported books above €1bn, excluding joint lead manager interest, and after around three hours, they set the spread at plus 12bp on the back of books above €1.1bn. The size was ultimately set at €750m (C$1.04bn) on the back of more than €1.25bn of orders, pre-reconciliation.

“This was a convincing exercise,” said a syndicate banker away from the leads.

Desjardins’ two year euro benchmark comes after €2bn trades in the maturity from compatriot Bank of Nova Scotia and Australia’s ANZ on 24 October and 7 November, respectively, with the former having been priced at 12bp and the latter at 14bp. According to pre-announcement comparables circulated by the leads, BNS’s deal was trading at 10bp, mid, and ANZ’s at 12bp. A lead banker said that while Desjardins’ curve implied fair value of 6bp-7bp, the recent two year supply was more relevant in terms of offering a “true” picture of fair value

“€750m at 12bp exactly matched the issuer’s expectations,” said the lead banker. “We understood that it’s a bit late in the year and investors are getting more and more fatigued, but we had seen those two year trades go quite well.”

He said that had Desjardins been targeting a €1bn size, a wider starting point would have made sense, while the issuer was happy to price at a level that would leave some room for performance and stand it in good stead in the long run.

“Two years is really the sweet spot for non-Eurozone trades,” he added, “maybe even two to three years, but I wouldn’t go longer at the moment. We’ve seen that five years is doable from Westpac last week, but it’s not the maturity investors are focused on and it will be quite costly as the curve is steep and getting steeper on a daily basis.”

Westpac priced a €750m five year deal last Tuesday at mid-swaps plus 35bp.

UniCredit Bank AG (HVB) leads BBVA, Deutsche, DekaBank, ING and UniCredit opened books for the €750m no-grow February 2026 mortgage Pfandbrief, expected rating Aaa, with initial guidance of the mid-swaps plus 6bp area. After around two-and-a-quarter hours, they reported books above €900m, excluding JLM interest, and around half an hour later revised guidance to 3bp+/-1bp, will price in range (WPIR), on the back of books above €1.1bn. The spread was then set at 12bp, with orders above €1.1bn, and the final book was above €1bn, pre-reconciliation.

Syndicate bankers away from the leads put the new issue premium at around 5bp and saw the outcome as a good result. One noted how the book had grown after the pricing revision, helping HVB achieve the 2bp spread – something he said the WPIR step had suggested the issuer was not fully confident of achieving.

“Today’s results are along the lines of what we have seen recently,” said another syndicate banker. “A billion or three-quarters of a billion here or there after a super-active year and it being almost the end of November – nothing major, but nothing wrong with that.

“There isn’t a strategic pipeline to speak of, but if you have €500m or €750m left to do, the option is there, and people are still looking and deciding on a daily basis.”

But one syndicate banker suggested waiting until the new year may prove a better choice in the covered bond market, particularly for those seeking longer maturities.

“I would definitely not push anybody into this market,” he said. “You will be paying a horrible new issue concession for a five or seven year.

“I believe that next year, after all their P&Ls have reset, investors will be more supportive of new issues, allowing for bigger books and more pricing power on the issuer side.”