Banesto launched the first Spanish cédulas benchmark since March in a test of demand for second tier peripheral offerings amid a frenzy of new issue activity this (Monday) morning, while Crédit Agricole Public Sector SCF and HYPO NOE were also out with covered bonds.

Some 15 deals were said to be live across the corporate and financials markets, with senior unsecured benchmarks from Banco Bilbao Vizcaya Argentaria (BBVA), Intesa Sanpaolo, and Leaseplan among those adding to the three covered bonds and a “truckload” in corporates, according to syndicate officials.

And more is in the pipeline, with another Austrian covered bond, for example, expected to be launched tomorrow.

The hive of activity comes after Mario Draghi, president of the European Central Bank, on Thursday lifted markets by announcing details of a sovereign bond buying programme, including that the ECB would not lay claim to seniority of bonds purchased under the Outright Monetary Transactions (OMTs), as the programme has been called.

A syndicate official said that all the deals in the market were working to some degree, but that the lower the quality of the offering, the slower order books were being built, noting that there was less momentum in BBVA’s and Banesto’s deals while Intesa’s benchmark went very well.

A transaction from Iberdrola was positive, however, he added, so that generalisations about Spanish debt cannot be made.

“It’s a mixed, fragmented, picture,” he said. “You have to look at each deal.”

Banco Español de Crédito (Banesto) entered the market this morning with a Eu500m long four year cédulas hipotecarias that leads Banesto, Credit Suisse, Goldman Sachs, and UBS marketed at the 395bp over mid-swaps area.

Banesto’s deal is the first benchmark covered bond in around six months from a second tier peripheral issuer, with Italy’s UniCredit only having recently brought the first peripheral supply of any kind since the end of March, when Banco Popular Español sold a Eu600m five year cédulas at 255bp over. Banesto is a subsidiary of Banco Santander, which on Friday sold a Eu2.5bn three-and-a-half year senior unsecured benchmark at 390bp over mid-swaps.

A syndicate official away from the Banesto leads said the level seemed sensible, and that the deal would show how much demand is there for lower tier issuers from peripheral jurisdictions. Others noted that the pricing was aggressive, with one putting the spread at around 60bp over Bonos.

Around Eu700m of orders had been gathered for the cédulas transaction half an hour before the order books were due to be closed, at 1215 CET, according to a lead syndicate official. More than 75 accounts were in the order book, and the spread has been fixed at 395bp over, he said, which equates to around 50bp over Bonos.

“It’s in very good shape,” he said.

He said that the amount of supply in the credit markets today meant that investors had needed time to analyse the range of deals on offer and analyse each on their own merit, but that Banesto’s deal had met with a good reception.

The pricing is aggressive, but fair, he added, and captures the direction in which spreads are travelling rather than where secondary market spreads are at the moment.

“Secondary market levels are very variable,” he said, “and for some sub-national champion names the rally is taking longer to filter through.

“The new issue spread is a better reflection than secondary market levels.”

He put a June 2016 Banesto covered bond at 370bp over offered and said that in comparison with that pricing of 395bp over on today’s new issue for Banesto represented a reasonable concession, but that versus mid-market levels today’s deal is coming at least flat to if not through secondary market levels.

Crédit Agricole is selling its first public sector backed obligations foncières today via its new issuer, Crédit Agricole Public Sector SCF, which it presented to investors last week. Leads BNP Paribas, Crédit Agricole, Credit Suisse, Erste, LBBW and Lloyds marketed a Eu1bn maximum seven year deal at 50bp-53bp over and will price the deal at 50bp over on the back of an order book of at least Eu1.5bn involving some 105 accounts.

The covered bonds are secured by loans backed by government-supported export credit agencies (ECA), and represent the last French benchmark covered bond supply since the middle of June, when Caisse de Refinancement de l’Habitat tapped a March 2024 issue for Eu750m.

HYPO NOE Gruppe Bank will price a Eu500m no-grow seven year Austrian public sector Pfandbrief at 32bp over mid-swaps, the tight end of guidance of 32bp-34bp that followed initial price thoughts of the 35bp over area.

Barclays, BNP Paribas, Commerzbank and LBBW built an order book of more than Eu1bn, according to a lead syndicate official.

“It went very well,” he said. “It was a very solid deal in an extremely crowded market.”

HYPO NOE last came to the benchmark covered bond market in early May, with a Eu500m 10 year that was re-offered at 88bp over.