The first euro benchmark in two weeks, a €1.25bn long eight year for Crédit Agricole on Tuesday, proved that conditions remain strong, and deals are expected ahead of a European Central Bank meeting on Thursday, but supply is expected to remain lighter than in the first quarter.

Pricing on the Crédit Agricole Home Loan SFH December 2032 benchmark was tightened from the mid-swaps plus 42bp area to 34bp on the back of a peak book above €2.65bn, and after the spread was set and the deal sized at €1.25bn, the final book stood at €2.18bn-plus, including €30m of joint lead manager interest.

The pricing was put at 1bp inside fair value, according to the leads, who circulated pre-announcement comparables including Crédit Agricole December 2030s, issued in February, at 30bp, mid, and January 2034s, issued in January, at 37bp.

The French deal demonstrated that any lack of supply was not due to deteriorating conditions, said bankers. A syndicate banker at one of the leads noted that the deal had even achieved its favourable outcome despite coming on a weaker day as the market reacted to US data on Monday.

“There was a bit of rates volatility, but we again saw a very strong trade,” he said. “The fact that there is not much supply overall helped, but we just generally still have very good appetite for covered bonds.

“The tenor is not everyone’s cup of tea, between seven years that bank treasuries would prefer and 10 years very much liked by insurers,” added the banker, “but the numbers speak for themselves, so that didn’t really affect the outcome.”

The Mortgage Society of Finland (Hypo) on Wednesday issued a €300m five year sub-benchmark at mid-swaps plus 43bp, following guidance of the 50bp area.

“This worked very well,” said a syndicate banker away from the leads. “In order to get a sub-benchmark going smoothly, you normally require a constructive environment, which is something we obviously enjoy at the moment.

“So they had no trouble at all: an €800m-plus book for a €300m deal and moving 7bp from start to finish.”

The Crédit Agricole issue was the first new euro benchmark covered bond since 19 March. The holiday season around Easter was cited as key to the lack of supply, but syndicate bankers also cited the front-loading of issuance by financial institutions this year as contributing to the lull by reducing issuers’ ongoing needs, with one suggesting that, while picking up, supply would remain lighter.

“The second quarter is traditionally less active than the first,” he said, “and there’s also big banks heading into blackouts. So it’s going to be a little livelier than this week, but I don’t have the impression that we are running into a new issue avalanche.

“We are aware of two issuers looking to do something next week,” he added, “and given that Thursday is ECB, I believe that whatever deals come out will be done prior to Thursday.”

Equitable Bank on Tuesday began marketing a short dated social euro benchmark, which will be its first euro benchmark covered bond, as well as the first Canadian euro benchmark in green, social or sustainable format.

Barclays, DZ, Erste, LBBW, RBC, Scotiabank and TD have been mandated and a banker at one of the joint leads said marketing will continue in the coming week, with launch not likely until the following week. The covered bond has expected ratings of AA from Fitch and DBRS.

Sparkasse Bremen will be marketing an inaugural sub-benchmark Pfandbrief from Monday, also anticipating launch the week after. DekaBank, DZ and Helaba have the mandate for the savings bank’s €250m mortgage Pfandbrief, which are expected to be rated AA+ by Fitch. A maturity has not yet been announced.

The Bremer deal will be the second sub-benchmark covered bond debut from the German savings bank sector this year, after Sparkasse Dortmund on 14 March sold a €250m seven year at mid-swaps plus 45bp.

Singapore’s Maybank meanwhile remains in the pipeline, albeit on a longer term basis. The issuer is holding a non-deal roadshow to introduce its new covered bond programme from 15 to 19 April.