ING Bank was earning praise from syndicate bankers this (Wednesday) morning for the way in which it reopened the benchmark covered bond market today, selling a 10 year deal with a new issue premium they said secured a positive outcome.

The Dutch bank broke an almost seven week lull in new euro benchmark supply by launching a 10 year issue via Barclays Capital, BNP Paribas, Deutsche Bank and ING. Guidance was set at the 80bp over mid-swaps area, in line with initial pricing thoughts. More than Eu1.5bn orders are understood to have been placed by around noon CET.

Syndicate officials away from the leads commended the transaction, with one saying that it was “a brilliant move from a brave issuer”, later adding adjectives such as “clever” and “right” to a description of his first impressions of the deal.

Another said that the transaction was “perfect”, with 10 years representing the maturity accounts were after. Guidance of the 80bp over area was somewhat cheap in his view compared with secondary market levels, and he said he would have put the deal in the 75bp-77bp range. However, he said that he couldn’t criticise the issuer, concluding that it had pursued a sensible strategy and had made the right call.

“Overall it’s a great trade,” he said, “and great for the market as a whole, too.”

Another syndicate banker said that although ING was not his natural first choice to reopen the market “at the end of the day I’m not too bothered, as long as a successful trade gets done”.

The 80bp over area contained a new issue premium of around 15bp over, he said, adding that this was the right size to ensure a successful transaction. The 15bp new issue premium was very wise given that its deal was reopening the market after the summer break and in the midst of an ongoing crisis, he said. Ten basis points represented the lower end of the range of new issue premiums he had envisaged as coming into play during the market’s reopening, but this smaller size “would have made for a tough trade”.

With order books at Eu1bn around mid-morning the deal had obviously worked, he added.

“It’s already going to be successful, it’s just a question of how successful,” he said.

Being able to fix the re-offer spread inside the 80bp over area, for example at 78bp over, would be “a great print”, he added.

There was scope for further benchmark supply this week, he said, urging issuers not to “fanny around”. A Pfandbrief issuer with an outstanding mandate should be next in line, he said, adding that it might not, however, be ready to go ahead for technical reasons.

Another syndicate official said that the 80bp over area represented a spread 10bp-15bp wider than where a 10 year ING deal would have come in July and that most of this extra spread was a new issue premium.

ING last tapped the benchmark market on 25 May, with a Eu350m increase of a March 2017 issue, and before that had sold a Eu2bn five year at 57bp over mid-swaps on 24 February. ABN Amro Bank was the last Dutch bank to sell a new covered bond, a Eu2bn 10 year that came at 75bp over at the end of March.

Dutch covered bonds had since the beginning of the summer “joined the club that together with the Nordics and Germany are seen as safe”, trading at levels roughly in line with those prevailing in July, he said.

He identified as a concern on the horizon the risk that a new French benchmark could reprice the market given that French covered bonds would come “very cheap”, and suggested that ING was wise to have come in advance of French deals.

However, he said that he expected ING’s deal to perform and that participating investors would be protected from any French-led repricing because the transaction had come 10bp-15bp wider than the secondary market curve and the “core won’t widen that much”.

HSBC SFH has announced that it will be going on a roadshow to present a newly legislative covered bond programme to investors. The issuer was previously called HSBC Covered Bonds (France) and sold structured French covered bonds before these were accommodated under obligations de financement à l’habitat legislation introduced earlier this year.