Barclays reopened the sterling market with its first covered bond in three-and-a-half years today (Monday), a £500m FRN that attracted over £2.5bn of demand. Euro benchmark issuance is set to resume tomorrow with Bawag PSK, after subdued sub-benchmark-only supply today.

Barclays Bank’s mandate was announced yesterday (Tuesday), and this morning leads ABN Amro, Barclays, Commerzbank, Danske, ING, Lloyds, RBC, Santander, Standard Chartered and TD opened books for the £500m (€573m) no-grow five year floating rate note, expected ratings triple-A, with initial guidance of the Sonia plus 75bp area.

After around an hour and a quarter, they reported books above £2bn, and after a little over two-and-a-half hours, they revised guidance to plus 68bp+/-3bp, will price in range, on the back of books above £2.9bn, including £105m of joint lead manager interest. The deal was ultimately priced at Sonia plus 65bp with demand above £2.6bn, and the final book was put at around £2.5bn, including £105m of JLM interest.

The new issue is Barclays’ first covered bond issue since May 2019.

Euro benchmark issuance paused today, after five deals for €5.3bn in the first two days of the week, but sub-benchmark supply continued.

Møre Boligkreditt entered the market this morning with a €250m no-grow green covered bond after a mandate announcement yesterday.

Leads LBBW, Nordea and Swedbank opened books with guidance of the mid-swaps plus 25bp area for the five year Norwegian deal, expected rating Aaa, and after around two-and-a-half hours set the spread at 25bp on the back of books above €250m, including €20m of JLM interest, with the final book reaching €315m.

A syndicate banker at one of the leads said demand for sub-benchmarks was softer today, resulting in insufficient momentum for the price to be tightened, and oversubscription only occurring once the spread was set. He put the new issue premium at 12bp-13bp.

“But the quality of the book was really nice,” he added, “with treasuries, some central banks and others.”

The lead banker suggested the subdued demand was the result of investors becoming increasingly cautious with respect to duration.

“It feels like five years is maybe going out of focus for a portion of accounts who even two weeks ago were happy to take it,” he said. “It is now something up to three-and-a-half or four years, perhaps three-and-a-half maximum for non-Eurozone names, so the shorter the better argument is still very valid and perhaps the strongest one.”

Sparkasse Hannover was able to tighten the pricing on a €250m no-grow four year mortgage Pfandbrief, also announced yesterday, by 2bp, from 8bp to 6bp, with a final book of €350m good at re-offer. DekaBank, Helaba and NordLB were leads.

Benchmark supply is set to resume tomorrow (Thursday), with a Bawag PSK four-and-a-half year mandate having been announced today. BayernLB, Commerzbank, DZ, Erste, LBBW and UBS are leads.

The Austrian’s January 2027s were seen at 8bp, mid, and its January 2028s at 9.5bp, according to pre-announcement comparables circulated by the leads.

Finland’s Oma Savings Bank is planning to increase its €350m December 2026 issue up to benchmark size, with a tap of up to €250m, as flagged when the deal was initially launched in May. Danske, Erste and LBBW have the mandate.

The outstanding paper was quoted at plus 9bp, mid, according to pre-announcement comparables circulated by the leads. The Mortgage Society of Finland yesterday issued a €300m five year at plus 23bp, while an Sp Mortgage Bank €750m five year was issued on 24 October at 20bp and last seen at 19bp.