Banco Sabadell and NN Bank today (Tuesday) successfully issued what are expected to be the last euro benchmarks to benefit from Eurosystem CBPP3 primary market buying, selling €1bn and €750m deals, respectively, after Crédit Agricole and SEB got the week’s supply off to a €3.5bn start.

The Eurozone issuers enjoyed the Eurosystem bid for 10% of trades in place since last week, ahead of an anticipated cut to zero for deals settling from 1 March – which is likely to be the case for any subsequent euro benchmarks using standard settlement practices.

However, some participants expect CBPP3 to remain supportive for the asset class in the near term, at least.

“The bid of the Eurosystem in the secondary market should remain powerful in March given the elevated amount of redemptions,” said one. “Thereafter, it is unclear – redemptions are much lower in Q2, while the €15bn the ECB intends to remove from the market between March and June pro rata across the four APP programmes will start having an impact.

“It will be more or less pronounced on spread performance depending on the density of supply in SSAs, particularly if swap spreads continue to narrow.”

After a mandate announcement on Monday, Nationale-Nederlanden Bank (NN Bank) leads ABN Amro, Deutsche, HSBC, LBBW, Rabobank and SG opened books this morning with guidance of the mid-swaps plus 14bp area for a euro benchmark-sized May 2027 green covered bond, expected rating AAA (S&P). The spread was set at 10bp and size at €750m on the back of books above €1.7bn, and demand ultimately reached some €2bn.

The new issue premium was seen at around 1bp – NN Bank September 2025s were at plus 6bp and its September 2028s at plus 12bp, according to pre-announcement comparables circulated by the leads.

Banco de Sabadell leads Barclays, Commerzbank, JP Morgan, Natixis, Sabadell and UniCredit priced the Spaniard’s €1bn August 2026 cédulas hipotecarias, expected rating Aa1, at mid-swaps plus 25bp following initial guidance of the plus 32bp area, tightening pricing some 7bp on the back of some €4.25bn of orders to land at a new issue premium of just a couple of basis points.

Syndicate bankers noted that the two issuers had tapped the still-favoured short end of the curve with their four-and-a-quarter and three-and-a-half year trades, respectively. NN Bank’s green success followed that of its green debut last May, and Sabadell found strong demand for its peripheral paper while taking year-to-date Spanish supply to €7bn, more than the €6.5bn across the whole of 2022.

Crédit Agricole Home Loan SFH attracted aggregate demand of some €3.8bn yesterday (Monday) for September 2026 and September 2032 tranches, allowing €1bn apiece to be printed 5bp and 4bp inside initial guidance, respectively, at plus 3bp and 29bp, equivalent to NIPs of 1bp-2bp.

Demand was slightly skewed to the shorter-dated tranche, and a banker noted that SEB achieved stronger execution momentum with its €1.5bn five year trade yesterday than had Nordea Mortgage Bank with a €1bn seven year last week. The Swede was able to tighten pricing from the mid-swaps plus 19bp area to 15bp on the back of some €2.5bn of orders and achieve a new issue premium of around 3bp.

A banker also highlighted that the non-Eurozone five year came at the same re-offer spread as a shorter dated, June 2027, issue from France’s Crédit Mutuel on Monday of last week, highlighting the normalisation of the market as the ECB exits the primary market.