The steady flow of new covered bond euro benchmarks and mandates continued today (Thursday) as Cajamar opening cédulas issuance for 2024 and La Banque Postale teed up the latest French 10 year for tomorrow, while Germany’s OLB AG is eyeing a debut benchmark.

The activity follows €1bn short 10 year Caffil and €750m six year Banco BPM trades yesterday (Wednesday) that showed the covered bond market to be resilient in the face of renewed volatility that was making life challenging elsewhere.

“Despite the negative macro news yesterday, we saw two strong trades,” said a syndicate banker. “The rates market has not really been affected by the macro side – you feel it way more in the credit space.

“That’s a good thing,” he added, “because we’re back to covered bonds being able to be done in rainy days, rather than last year where it was a bit difficult at any time.”

Following a mandate announcement yesterday, Cajamar Caja Rural leads BBVA, Crédit Agricole, Deutsche, Nomura and Santander opened books this morning with guidance of the mid-swaps plus 80bp area for the euro benchmark-sized July 2029 cédulas hipotecarias, expected rating AA+ (S&P). After around two-and-a-half hours, they reported books above €820m, including €120m of joint lead manager interest, and after around three-and-a-half hours, they set the spread at 78bp on the back of books above €890m. The size was subsequently set at €600m, with the book above €920m, and the final order book was above €875m.

“It went pretty well, overall,” said a syndicate banker at one of the leads. “We tightened pricing 2bp, leaving about 7bp of new issue premium, and the good news is, you clearly had some investors that saw value and came into the book, which allowed us to take a little bit more than €500m and deliver that to the issuer.”

According to pre-announcement comparables, Cajamar 3.375% February 2028s were seen at 61bp, mid, Caja Rural de Navarra 0.75% February 2029s at 50bp, Sabadell 1.75% May 2029s at 63bp, Abanca 0.75% May 2029s at 45bp, and UniCaja 0.25% September 2029s at 60bp, while 3.5% May 2029 Bonos were at 22bp.

Another syndicate banker noted that Cajamar is a second tier name more comparable with Banca Popolare di Sondrio in Italy than with Banco BPM, who both tapped the market earlier this week, with the latter achieving a bigger book. He also said that the lack of a domestic investor base in Spain comparable with Italy’s not only constrains demand in itself, but also influences international investors’ interest in such offerings.

After Caffil’s short 10 year yesterday, La Banque Postale Home Loan SFH is set to become the fourth French issuer to tap the 10 year part of the curve tomorrow (Friday). It has mandated BNP Paribas, Crédit Agricole, ING, La Banque Postale, UBS and UniCredit as leads for a green 10 year benchmark.

Caffil’s November 2033s were priced at mid-swaps plus 47bp and, according to pre-announcement comparables, at 46bp, mid, today, while Crédit Agricole green January 2034s issued on 3 January were at 48bp. La Banque Postale social 3% January 2031s were at 35bp and its 0.25% February 2035s at 45bp.

Oldenburgische Landesbank AG (OLB) is planning an inaugural benchmark mortgage Pfandbrief. The German issuer has mandated Danske, DZ, Deutsche, Erste, NordLB and UniCredit to arrange investor calls from today ahead of an eight to 10 year €500m no-grow transaction, expected rating Aa1.

The bank has two sub-benchmarks outstanding, the most recent a €350m issued in April 2022.

Shinhan Bank and HCOB mandates remain in the pipeline.