Four new benchmarks hit the market this (Wednesday) morning, including the first Australian deal in euros, after Eu5.25bn on the first full trading day of the year yesterday, with market participants remarking that issuers appear to be prioritising size over price.

Attracting more than Eu2.75bn of orders, a five-and-a-quarter year issue for DNB Boligkreditt appears to have been the most popular of today’s deals, which included transactions for Commonwealth Bank of Australia, Crédit Agricole Home Loan SFH and Lloyds TSB Bank.

The four issues came after deals for Caisse de Refinancement de l’Habitat, ING Bank and UBS yesterday totalling Eu5.25bn, which is believed to mark the biggest day for covered bonds in terms of volume since 11 October (see separate articles for reviews of these deals).

The high supply means the visible pipeline is shrinking quickly, although plenty of new issue projects remain, with ANZ, NAB and SNS having mandated euro deals. Royal Bank of Scotland is understood to be planning to meet with investors ahead of a possible sterling issue and German Pfandbrief issuers such as Münchener Hypothekenbank and Aareal Bank have also been mentioned as candidates. Older mandates for issuers such as Terra BoligKreditt are also outstanding. Friday is a holiday in many parts of Europe, which could influence issuance plans.

“It’s a short week, but it’s impressive for the moment,” said a banker.

Today’s deals came as the senior market sprang into life, with Rabobank out with a 10 year issue and ABN Amro and Nordea tapping the seven year part of the curve with fixed rate deals.

Syndicate bankers noted the high amount of covered bond supply and said that the market was functioning well, with issuers eager to launch deals.

“There is good demand and conditions are fairly stable so there is clearly a market window,” said one.

Other market participants said it appeared that issuers were prioritising size over price, with Dexia analysts noting that bids only slightly exceeded allocated amounts on yesterday’s deals and a covered bond banker referring to yesterday as a WYSIWYG day: “What You Subscribed Is What You Get.”

“This might limit rapid secondary tightening and set these latest levels into stone for the other issuers,” he added.

A syndicate official said that the market was working well, but at a price.

“It seems that issuers are going for size,” he said. “It’s this ‘all you can eat’ approach, which is always easier at the beginning of the year.

“But this market always runs the risk of hitting that one deal that is one deal too many.”

Assessments of new issue premiums varied, with some market participants putting those on yesterday’s deals in the 10bp-20bp range and others putting a smaller number of 5bp-7bp on the new issue concession for a UBS deal. A 15bp-20bp range was mentioned by one banker in relation to today’s deals, although another saw the new issue premium for a DNB Boligkreditt issue tighter, at 5bp.

The Norwegian issuer came to the market today with a 5.25 year at 68bp over mid-swaps after announcing the deal on screens yesterday. Leads Barclays, BNP Paribas, Deutsche Bank and UniCredit built a book in excess of Eu2.75bn by closing at 1115 London time and are pricing a Eu2bn deal.

The spread was tightened from initial guidance of the 70bp area. A syndicate official at one of the leads said guidance was based on an outstanding DNB January 2017 at 62 bid and an August 2017 at 65 bid.

“We paid a new issue premium of about 5bp,” he said.

A syndicate official away from the leads commented that the 5bp concession was quite an achievement for the issuer.

Crédit Agricole Home Loan SFH is pricing a Eu1.5bn 10 year benchmark at 165bp over. Leads Crédit Agricole, Danske Bank, Société Générale, UBS and UniCredit tightened the spread from the guidance of 165bp-170bp over.

A syndicate official away from the leads said that the pricing sensible. The books were closed at 1115 London time with orders above Eu1.8bn.

Lloyds TSB Bank is in the market with a five year deal, its first new issue in euros since the end of March. Leads Barclays Capital, Natixis and UniCredit gathered more than Eu1.6bn of orders on the basis of guidance of the 185bp over area, and have fixed the re-offer spread at 180bp over.

A syndicate official away from the leads said that he saw the UK bank’s covered bonds at around 160bp in five years before the deal was announced. The last UK benchmark to come in euros was a Eu750m five year for Royal Bank of Scotland that was priced at 150bp over in the middle of November.

Another banker away from the leads said Lloyds was paying a 20bp concession, the new norm for UK issuers.

Commonwealth Bank of Australia launched the first Australian euro covered bond this morning, a Eu1.5bn five year deal that BNP Paribas, HSBC and RBS are pricing at 100bp over mid-swaps, in line with guidance. More than Eu1.5bn of orders were placed.

The mandate goes back to November, at least, when ANZ and Westpac turned to the dollar market, a move that NAB is also understood to have considered.

Fellow Australian banks NAB and ANZ have also mandated for euro issues and are waiting in the wings to enter the market, giving CBA clear water for its transaction. Market participants said that they expect interest for Australian euro supply to be strong given the diversification opportunity they represent.

A syndicate official said that the 100bp over area “seems reminiscent” of New Zealand supply, and that the level looked OK. The last covered bond supply from the region in euros was a Eu500m five year for ANZ National (International) that came at 95bp over mid-swaps in October.