Dexia Kommunalbank is deciding whether or not to launch a covered bond tomorrow (Wednesday), which is probably the only issuance window left this week, according to bankers, as public holidays look set to leave May supply almost half that of May 2013. Several roadshows take place next week.

No new issues hit the benchmark covered bond market today (Tuesday), although the senior unsecured market got off to a relatively busy start in euros with Credit Suisse out with a five-and-a-half year issue, Bankinter a five year and Goldman Sachs a 12 year.

However, a syndicate official noted that several issuers are on roadshows next week. Nationwide has announced a non-deal euro roadshow, and Canada’s Caisse centrale Desjardins du Québec (CCDQ) and Westpac New Zealand will also be meeting with investors. Westpac NZ is working with Barclays and UBS. A syndicate banker said that he would expect Nationwide to consider a covered bond after having already priced a euro senior unsecured deal this year.

Euro benchmark covered bond supply for the month so far stands at Eu4.25bn, and with tomorrow probably the only day left for issuance in May, the market is on course for an almost 50% decline on last year’s issuance for May, which totalled Eu8.275bn.

Dexia Kommunalbank Deutschland (DKD) (pictured) was on a roadshow last week, working with Barclays, Commerzbank, DZ Bank and HSBC. A syndicate official at one of the leads said that a decision would be taken today as to whether the bank will issue tomorrow.

“It is safe to say though that with the week cut short by yesterday’s bank holiday in the UK, and Thursday’s bank holiday across Europe, if there is no issue tomorrow, the market will have to wait until next week,” he said. “There is no rush from the issuer to make the deal this week’s business.”

The syndicate banker added that last week’s covered bond issues showed that while there is a market, it is not a strong market.

“Recent trades suggest that perhaps now is not the right time for covered bonds,” he said.

Three new issues were priced last week, for a total of Eu2.75bn: a Eu1bn seven year cédulas for Kutxabank, a Eu1bn dual tranche Pfandbrief for Helaba, and a Eu750m seven year deal for National Australia Bank.

Syndicate officials said that the market today was quiet and that this was indicative of a weakened market. However, another syndicate banker disagreed with this analysis, saying the market was strong.

He highlighted a Eu2.2bn order book for Credit Suisse’s senior unsecured benchmark as evidence of this. The deal was marketed with initial price thoughts of the 60bp over mid-swaps area before guidance was set at the 58bp over area.

“The market in general is supportive, as seen by the strength of Credit Suisse’s order book,” he said. “In terms of covered bonds, with investors seeking yield and spread, it would be easier for a peripheral issuer. Those reluctant to give spread may find themselves sidelined.”

According to the syndicate banker, a Nordic issuer is eyeing the market and may potentially choose tomorrow to issue, but he noted that Nordic banks are well-funded and are in no rush to issue.

He said that last week’s European Parliament elections did not have any impact on spread levels in the market.

“All in all, the EU elections were a non-event as far as the financial market was concerned,” he said.