Banco Popular Español was in the market this (Wednesday) morning with a five year benchmark that market participants said came with only a limited new issue premium. Meanwhile, funding officials at HSH Nordbank and LF Hypotek commented on their issuance prospects.

The Spanish bank set initial guidance on its five year cédulas at 255bp-260bp and opened books at 1030 CET via leads BNP Paribas, Citigroup, Crédit Agricole and Deutsche Bank. Books were in excess of Eu500m with 50 investors involved by 1130 CET, according to a syndicate official away from the leads.

The leads fixed the spread at 255bp over and closed the books at 1245 CET.

“It’s more or less in line with what I expected,” said the syndicate official. “There is no positive or negative surprise.”

He said it was the kind of trade he expected out of the jurisdiction.

“It is more or less flat to secondaries if it prices at the tight end,” he noted.

BPE is the third Spanish issuer to come with a five year benchmark this year, after CaixaBank and Bankinter sold Eu1bn deals in that maturity in February and earlier this month, respectively. A syndicate official away said these were trading at around 250bp, and that the pricing on BPE’s deal was not very generous.

“The deal is working, but it’s not a blowout,” he said. “The deal could have done with a bit more of a spread to be more successful.

“It won’t be very oversubscribed.”

A syndicate official at one of the leads compared the pricing with a Banco Popular Español October 2016 at 248bp on the mid, adding that there was a minimal new issue premium.

Another banker away from the deal said it was positive to see another Spanish benchmark.

“It’s possible to get more cédulas out there,” he said. “We still have this market normalisation process, so I would like to see BBVA come out for further normalisation.”

Bankinter’s five year issue was the last Spanish benchmark, coming on 12 March.

Banco Popular Español’s deal is the week’s first covered bond benchmark, with syndicate bankers attributing low supply in part to issuers waiting for “even better” market conditions, as spreads continue to tighten.

“We’re just in a lull for the moment,” said one.

The senior unsecured market has been busier this week, however, with Belgium’s KBC yesterday (Tuesday) pricing a Eu1bn five year at 285bp over mid-swaps and ABN Amro and Erste Bank in the market today with 10 and five year deals, respectively.

Natixis analysts said today that covered bonds spreads have tightened since last week, with UK, French and Austrian covered bonds outperforming those of other core jurisdictions week-on-week, and Spanish and Italian covered bonds overall stable.

HSH Nordbank will start a non-deal related roadshow on Friday running to Tuesday, with Commerzbank working with the issuer.

Frank Teuber, head of funding execution and syndicate at HSH Nordbank, told The Covered Bond Report that the bank is focussing on presenting to investors the bank’s 2011 full year financial figures, which are released on Friday.

“We are of course an issuer and if feedback is positive we may consider coming to market,” he said, “but this is not the focus of the roadshow, which is very much non-deal related.”

The roadshow starts with one-on-one meetings and group presentations in Frankfurt on Friday before heading to other German destinations next week, with a visit to London also possible, according to Teuber.

Sweden’s Länsförsäkringar Hypotek is said to have put out a RFP around two weeks ago and has been mentioned as a possible issuance candidate to follow up on successful Swedish supply last week.

A syndicate official noted that LF Hypotek is a good credit, adding that it was one of Sweden’s smaller players.

“It would probably opt for Eu500m,” he said. “It does roughly a transaction once a year, and it’s usually Eu500m.”

Martin Rydin, vice executive president at LF Hypotek, told The CBR that the issuer will probably launch a euro benchmark transaction in 2012 but that it has not at the moment made any decision on this.

“Our strategy stands firm,” he said, “and that is to be a regular issuer and to come to the euro market once every 12-18 months, in line with what we have communicated in the past,” he said.

He said that LF Hypotek could theoretically set up a US dollar issuance programme but that there is little incentive to do so given that its funding needs are limited and it can access the euro and domestic markets.

A syndicate official said Swedish issuer SEB had been rumoured, but was not an imminent candidate.