A €500m Arkéa Public Sector SCF seven year today (Friday) took the week’s euro benchmark issuance to a respectable €9.75bn from 12 tranches and 11 issuers, as covered bond supply belatedly picked up towards traditional new year levels amid bumper demand that flattened new issue premiums.

The French issue – the fourth of the week and fifth of the year – attracted some €3.5bn of orders against its €500m no-grow size, allowing for 10bp of tightening from initial guidance of the mid-swaps plus 70bp area to 60bp, flat to fair value, according to a syndicate banker at one of leads Arkéa, Crédit Agricole, DZ, ING, Natixis and UniCredit.

“Today’s Arkéa was basically as mad as yesterday’s deals, as mad as the day before yesterday’s…” he added. “It’s definitely a very unusual situation: covered bond order books being seven to 12 times done is not what we are used to lately – it’s more like high beta corporate business or subordinated capital.

“So if you are in a position to make use of this grossly imbalanced demand-supply constellation, you may feel tempted to do something, and Arkéa was apparently tempted.”

The €9.75bn aggregate of issuance represented a sharp pick-up from last week’s €4.25bn, which had undershot expectations that were already low.

“Last week there wasn’t so much covered bond supply and everything enjoyed a lot of demand and went very well,” said a syndicate banker. “This week, while not gigantic, we have had a substantial amount, so scarcity isn’t such a factor, but we have continued to see everything work, from Bausparkasse Schwäbisch Hall to Hana Bank.”

The German’s €500m six year mortgage Pfandbrief achieved the highest oversubscription ratio and most demand of any tranche this week, some €6.3bn, meaning it could tighten pricing to flat to fair value – in line with several other regular issuers. A book of around €2.1bn and new issue premium of 2bp for South Korean Hana Bank’s €500m three year were at the more modest end of the week’s metrics, but deemed a success for the less frequented jurisdiction.

Issuing alongside the pair on Wednesday, Crédit Agricole Public Sector SCF could even achieve a negative new issue premium, coming 1bp inside fair value with a €500m 4.5 year deal that attracted some €3.9bn of orders at re-offer.

While no new issue premium was officially cited by lead managers of a Caja Rural de Navarra (CRN) €500m 8.25 year sustainable cédulas yesterday (Thursday), market participants put pricing comfortably inside fair value. The deal came after only four Spanish euro benchmarks last year and was the longest of the week, matching the achievement of fellow southern European Crédit Agricole Italia last week.

“With the scarcity of their cédulas, the €500m no-grow and social element were helpful in maximising demand from investors,” said a syndicate banker at one of the leads, “while we have seen the longer end work very nicely.

“It’s very impressive that they were able to achieve pricing through BPCE, even in a longer maturity. It really shows where the market is at the moment – especially for French issuers.”

CRN’s 8.25 year was priced at 58bp over mid-swaps, versus 65bp for BPCE SFH’s €1.25bn 7.2 year the same day.

Deutsche Pfandbriefbank (pbb) paid a new issue premium of 4bp for a three year mortgage Pfandbrief yesterday, but was able to tighten 7bp from initial guidance to mid-swaps plus 60bp and upsize from €500m to €750m on the back of some €3.7bn of orders.

“They have been through some difficult executions in the past,” said a lead banker, “so they were naturally a bit more cautious, but it was a fantastic outcome to see where they priced.”

A €2bn dual-tranche issue from Santander UK took the day’s supply to €4.5bn, making it the busiest day yet in 2025 with more than last week’s total issuance.

Blackouts could dampen issuance next week, with syndicate bankers expecting technicals to continue to support the primary market.