Covered bond supply was in full effect today (Monday) as Deutsche Kreditbank launched the longest euro benchmark in over six months – a successful €500m 12 year social Pfandbrief – one of four euro benchmarks totalling €3.75bn that could make this month the busiest ever January.

Alongside the German trade, a La Banque Postale SFH €1.25bn eight year, and National Australia Bank €1.5bn and Slovenska sporitelna €500m three year deals hit the market, taking year-to-date supply to €34.2bn, and at least three euro benchmarks are expected tomorrow (Tuesday).

All of today’s trades were tightened at least 2bp from initial guidance on the back of oversubscribed books, with some exceeding expectations, while transactions that were less impressive last week have tightened in the secondary market.

Among factors contributing to the rush to market is a potential cut in the Eurosystem bid as early as for February settlement dates, with today’s CBPP-eligible transactions settling on 30 or 31 January. Syndicate bankers spoke of rumours of an imminent cut in the standard order from 20% to 10%, although several analysts have said that a reduction the following month is more likely.

“This seems to be a motivating factor for issuers who are afraid that they probably need to pay up if this ever-supportive bid is falling away,” said a banker. “But given how transactions are going, I don’t think anyone will miss the ECB.”

Deutsche Kreditbank (DKB) leads ABN Amro, BayernLB, Commerzbank, Crédit Agricole, NordLB and UniCredit opened books for the €500m no-grow January 2035 social housing mortgage Pfandbrief, expected rating Aaa, with guidance of the mid-swaps plus 25bp area. After around 50 minutes, they reported books above €500m, excluding joint lead manager interest, and after around two hours, they revised guidance to 23bp+/-1bp, will price in range, on the back of books above €1bn. The spread was then set at 22bp after around two hours and 15 minutes, and the final book was €1.2bn, including €120m of JLM interest.

Syndicate bankers away from the leads said they were pleasantly surprised at the outcome, both the level of demand and the pricing, which they said implied a new issue premium of around 7bp.

“For 12 years, that’s great,” said one. “Knowing that there are a couple of other issuers looking at long-dated transactions, we can definitely say the market is more friendly.

“We have also seen more and more bids in the street for longer dated bonds,” he added, “so I believe it’s not the last trade we will see in the market.”

Another described the deal as “a roaring success”, saying he would have advised against going beyond 10 years, but had been proven wrong – and suggested that the social element had contributed to its outcome.

However, while the new issue premium was kept in check, the 22bp spread for the 12 year represented a 12bp pick-up to where parent BayernLB priced a €500m 10 year on 4 January.

“That’s the catch,” said the first syndicate banker, “so I’m not sure it would be for everyone.”

Noting that Dutch issuers typically look at the long end, he said that while Rabobank had priced a €1.25bn 10 year at 19bp over mid-swaps on 12 January, a top tier Dutch issuer might have to start with guidance of the 40bp area.

“That’s quite something,” he added.

After Caffil issued a €1bn seven year at mid-swaps plus 24bp on Friday, compatriot La Banque Postale (LBP) Home Loan SFH hit the market with an eight year debut social benchmark this morning.

Leads BBVA, Commerzbank, Crédit Agricole, IMI-Intesa Sanpaolo, ING and LBP went out with guidance of the mid-swaps plus 30bp area for the July 2031 euro benchmark social covered bond, expected rating AAA (S&P). After around an hour and a quarter, they reported books above €1bn, excluding JLM interest, and after around two hours and 35 minutes, they revised guidance to 28bp+/-1bp, WPIR, for an expected size of €1bn-€1.25bn on the back of books above €1.6bn. They then set the size at €1.25bn and the spread at 27bp on the back of books above €1.8bn, pre-reconciliation, after around three hours and 10 minutes, and the final book was above €1.6bn.

“This was a nice one that achieved the upper end of expectations,” said a banker away from the leads.

He put the new issue premium at around 6bp. Another said the execution compared favourably to Caffil’s, noting that the Friday trade was 1bp wider in the secondary market.

“It was perhaps a bit of a stretch moving 3bp and doing €1bn off a €1.5bn book.”

After Caffil’s and LBP’s deals, BNP Paribas Home Loan SFH is set to issue its first euro benchmark covered bond since February 2017. The French issuer has mandated ABN Amro, BBVA, BNP Paribas, CaixaBank, Commerzbank, Erste, RBI and Swedbank for the seven year deal.

Slovenska sporitelna followed up on a mandate announcement last week by today issuing a €500m no-grow January 2026 mortgage covered bond, expected rating Aaa. Leads Commerzbank, Erste, Helaba, LBBW and NordLB went out with guidance of the mid-swaps plus 35bp area, and after around an hour and three-quarters, they reported books above €500m, excluding JLM interest. After around two-and-a-half hours, they set the spread at 33bp on the back of books above €650m, and the final book was above €620m.

A lead banker said the choice of maturity had contributed to the strong outcome, noting that the issuer and its peers have typically tried to use covered bond issuance for funding of five years and longer.

“But if the market is not there,” he said, “you have to take what is possible, and it was a wise decision not to go longer.”

The Slovak issuer’s guidance also implied a pick-up of some 17bp over fair value of around 18bp, according to the lead banker. He said that while initial momentum was not too strong, investors drew confidence once the €500m book threshold was reached, allowing for the ultimately successful outcome.

National Australia Bank (NAB) leads Barclays, BNP Paribas, Commerzbank, HSBC and NAB went out with guidance of the mid-swaps plus 30bp area for the February 2026 euro benchmark, expected ratings Aaa/AAA (Moody’s/Fitch). After around an hour and 10 minutes, they reported books above €1.5bn, and after a little over two-and-a-half hours, they set the spread at 25bp on the back of more than €2.45bn of demand, including €110m of JLM interest. The deal was ultimately sized at €1.5bn with the final book above €2.35bn.

According to the leads, NAB January 2026s were at 22bp, and syndicate bankers said that while the long end is open, shorter than five years remains the easiest option.

“This went very well indeed,” said one. “This is what people like these days.”

Commerzbank is planning a three-and-a-quarter year (April 2026) euro benchmark mortgage Pfandbrief, via BayernLB, Commerzbank, Erste, Helaba, Santander and TD. According to pre-announcement comparables circulated by the leads, Commerzbank December 2025s were quoted at minus 5bp, bid, and its June 2026s at 1bp. LBBW €1bn March 2026s issued at minus 5bp last Monday (16 January) were seen at minus 9bp.

Raiffeisenlandesbank Oberösterreich is due with a three year mortgage Pfandbrief euro benchmark, for which Crédit Agricole, Erste, ING, LBBW and RBI are mandated. RLB Oberösterreich September 2026s were seen at plus 13bp, mid, pre-announcement, while UniCredit Bank Austria €1bn July 2026s, issued at 17bp on 12 January, were at 15.5bp.

In sub-benchmarks, Hypo Tirol Bank issued an inaugural green covered bond, a €300m five year mortgage Pfandbrief priced at mid-swaps plus 29bp by leads ABN Amro, DekaBank, Erste, LBBW and RBI.