The euro covered bond market picked up where it left off last week after the Easter break, with CCDJ successfully selling a €750m five year and three issuers mandating, including Santander Totta for the inaugural obrigações cobertas, with the first benchmark from Portugal since 2019.

BayernLB and Hypo Noe announced issuance plans alongside the Portuguese today (Tuesday), and the week looks set to at least match last week’s five euro benchmarks, with other candidates said to be looking at hitting the market once those already in the public domain clear.

Fédération des caisses Desjardins du Québec (ticker CCDJ) leads DZ, ING, LBBW, Natixis and RBC opened books with guidance of the mid-swaps plus 40bp area this morning for the euro benchmark-sized five year issue, expected ratings Aaa/AAA (Moody’s/Fitch). After close to two hours, they reported books above €1bn, excluding joint lead manager interest, and after around two-and-three quarter hours, they set the spread at 37bp on the back of more than €1.25bn of demand. The deal was ultimately sized at €750m (C$1.1bn), with the final book, pre-reconciliation, above €1.3bn, excluding JLM interest.

“Coming at short notice after the Easter break bore a little bit of a risk, with people maybe tired or in holiday mood,” said a syndicate banker at one of the leads, “but it went well.”

According to pre-announcement comparables circulated by the leads, CCDJ November 2027s were quoted at 30bp, and a syndicate banker at one of the leads put fair value at 31bp, implying a concession of 9bp at the 40bp guidance.

“We were mindful of the fact that there has been plenty of Canadian supply already,” he said, “and that there is most likely more to come, so you’d rather err a little on the side of caution here, and the 40bp area start was eye-catching.”

CIBC reopened the market post-SVB/CS two weeks ago with a €1.5bn four year on 27 March and Bank of Montreal issued a €2bn three-and-a-quarter year the next day, after Toronto-Dominion had on 6 March issued the equal-largest ever covered bond, €5bn split into three and seven year tranches.

“CCDJ is a particular name,” added the lead banker, “since not everyone has lines for them, but at the same time you are getting some interest here from accounts you might not get in a traditional European name, so it sort of balances out nicely.”

At the 37bp re-offer level, CCDJ’s new issue premium was 6bp.

“For €750m out of a book of some €1.3bn, this was money well spent,” said the lead banker “We are definitely happy with how it went and my impression is that the issuer is, too.

“And therefore a good start into the post-Easter session.”

Banco Santander Totta today announced plans to issue the first obrigações cobertas, the Portuguese instrument that will be a European Covered Bond (Premium) now that the country has implemented the EU Covered Bond Directive. The issuer is targeting a euro benchmark-sized five year soft bullet, expected ratings Aa2/AA-/AA (Moody’s/Fitch/DBRS), via leads Barclays, Crédit Agricole, Santander, SG and UniCredit.

The deal will be the first euro benchmark from Portugal since November 2019, when Caixa Económica Montepio Geral (Banco Montepio) issued €500m five year of obrigações hipotecárias. Santander Totta’s last euro benchmark was a €1bn 10 year in September 2017.

The bank said last month that it had received approval from the Portuguese Securities Markets Commission (CMVM) for the adaptation of its already-existing mortgage covered bond programme to the amended covered bond law, according to DZ Bank analysts, who noted it was thence the first Portuguese issuer to be ready to issue again.

Germany’s BayernLB is planning a €500m no-grow May 2029 mortgage Pfandbrief via BayernLB, Deutsche, Helaba, KBC and SG, and Austria’s Hypo Noe has mandated Erste, Helaba, LBBW, Natixis and UniCredit for a €500m no-grow five year public sector Pfandbrief.

Oma Savings Bank of Finland is meanwhile planning an expected €250m tap of its €400m November 2027 issue, which will take it to benchmark size. Danske, LBBW and Swedbank are leads.