€4.5bn of euro benchmarks from ANZ, BMO and Stadshypotek today (Tuesday) built on CIBC’s reopening of the market yesterday, with successful covered bond issuance from two to five years, although Eurozone issuers remained absent, potentially hoping for a decline in new issue premiums.

“This all went very much in line with base case expectations,” said a syndicate banker of today’s supply. “The new issue concessions issuers had to accept are probably a bit wider than before the Silicon Valley and Credit Suisse disasters, but other than this, the market has again proven to be super-resilient to anything you throw at it.

“There are still elements of shakiness to be felt in the wider market, but when it comes to covered bonds, this market just wants more.”

Another banker said the functioning of the covered bond market should hopefully support broader FIG activity.

“It’s really good to see ongoing demand for covered bonds,” he said. “It gives the overall banking sector a boost as banks are seen to have market access.”

Stadshypotek’s €1bn five year today is its inaugural green covered bond issue, and was backed by its Swedish cover pool.

Leads Barclays, HSBC, Nomura, SG and Svenska Handelsbanken opened books with guidance of the mid-swaps plus 20bp area for a euro benchmark-sized April 2028 issue, expected rating Aaa. Orders surpassed €1.25bn after around an hour and a quarter, according to an update from the leads, and after around two hours and 20 minutes, the size was set at €1bn and the spread at 16bp on the back of more than €2.25bn of demand, excluding joint lead manager interest and pre-reconciliation.

“Congratulations to everyone involved,” said a syndicate banker away from the leads. “This was probably the most dynamic deal of the day in terms of oversubscription, €1bn out of a €2bn-plus book.

“Apparently people quite liked the deal – with its green tint, it ticked quite a few boxes.”

He put the new issue premium at around 4bp, the lower end of the four euro benchmarks to have hit the market this week. The five year maturity is also the longest of the quartet.

Bank of Montreal (BMO) leads BMO, BNP Paribas, Commerzbank, Crédit Agricole, HSBC and ING opened books with guidance of the 32bp area for a euro benchmark-sized July 2026 issue, expected ratings Aaa/AAA/AAA (Moody’s/Fitch/DBRS). After around an hour and 25 minutes, they reported books above €1bn, and after around three hours and 10 minutes, they set the size at €2bn and spread at 28bp on the back of books above €2.4bn, excluding JLM interest, with the final order book size unchanged.

A lead banker said the pricing of the three-and-a-quarter year deal was roughly flat to where compatriot CIBC priced its €1.5bn four year yesterday (Monday), at 33bp, and 4bp-5bp back from BMO’s curve.

“The 3.25 year maturity fit the issuer’s needs and, as usual, the shorter, the deeper the investor base,” he said, “so it was no surprise that the book was bigger than CIBC’s.

“We got a good, high quality book together, so were able to tighten 4bp and then solve for size – as with CIBC yesterday, investors appreciated the clarity.”

Australia & New Zealand Banking Group (ANZ) leads ANZ, DZ, NatWest, SG and UBS opened books with initial guidance of the mid-swaps plus 18bp area for a euro benchmark-sized April 2025 issue, expected ratings Aaa/AAA (Moody’s/Fitch). After around three hours, they set the spread at 15bp on the back of books above €1.9bn, including €40m of JLM interest, and the deal was ultimately sized at €1.5bn, with the final book size unchanged post-reconciliation.

A lead banker said the initial guidance reflected a concession of 8bp.

“We took 3bp off the table, leaving the issuer and investors with 5bp over fair value, and this resulted in a rock solid €1.9bn book for a €1.5bn deal,” he said, “and, on balance, this aggregate provided the best balance.”

A syndicate banker said it remains to be seen if new issue concessions will diminish as the recovery builds, but suggested core Eurozone issuers have been waiting for an improvement in conditions before tapping the market.

“Many have done a lot already this year, and at tighter levels,” he added, “so why come when there is still a bit of price discovery involved? I can imagine that – unless they have funding programmes of a magnitude such that they can’t take a break – core Eurozone issuers may stand back and wait for concessions to come down a bit.

“It seems they want others to do the ice-breaking and could then be a bit more opportunistic.”