Three issuers were in the market this (Wednesday) morning with euro benchmark covered bonds – Crédit Mutuel Arkéa, Deutsche Bank and Lloyds TSB – after ABN Amro closed a new issue yesterday and Nordea accessed the US market for the first time with a $2bn trade via a Norwegian arm.

Lloyds TSB is in the market with a five year euro benchmark, having mandated leads BNP Paribas, Citi, Deutsche and Lloyds TSB for the new issue. Around Eu2.2bn of indications of interest are understood to have been taken with guidance at the 115bp area.

Royal Bank of Scotland sold a five year recently at 110bp over, which was at 105bp today, and a syndicate official away from the leads said he expected official guidance to be tighter than the 115bp area.

Deutsche Bank launched only its second covered bond this morning, a Eu1bn seven year. Leads Crédit Agricole, Commerzbank, Deutsche Bank, ING and UniCredit were quickly oversubscribed and tightened guidance from the 15bp area to 13bp-15bp over, before fixing the spread at 13bp with orders totalling some Eu2.4bn.

“It’s obviously a rare and high quality issuer, and even if the cover pool is full of commercial real estate, no-one cares,” said a syndicate official away from the leads.

He said that a 2020 issue from Deutsche Postbank, which is owned by Deutsche Bank, was trading at 15bp bid.

Crédit Mutuel Arkéa Covered Bonds this morning launched the first French structured covered bond since the Autorité de Contrôle Prudentiel (ACP) gave its approval on Monday to issuers to convert into sociétés de financement de l’habitat (SFHs), and their covered bonds into obligations à l’habitat. In a letter to investors yesterday Crédit Mutuel Arkéa Covered Bonds informed investors that it had received the ACP’s approval on Monday.

“This first step will be followed by the transformation of the company itself,” said the issuer. “We undertake to seek all necessary internal decisions to transform Crédit Mutuel Arkéa Covered Bonds into a SFH, which shall be renamed: Crédit Mutuel Arkéa Home Loans SFH.”

The issuer said that it expects the change to occur by the end of April.

Crédit Agricole, DZ Bank, JP Morgan and Crédit Mutuel Arkéa opened books on the Eu1bn 10 year issue with guidance of the 90bp over mid-swaps area and were soon oversubscribed. Books were closed at 1200 CET with orders totalling almost Eu1.5bn. After revising the guidance from 90bp to 87bp-90bp, the leads fixed the pricing at 87bp over.

A syndicate official at one of the leads described the order book as granular and as having gained traction with accounts across Europe.

“We are very pleased with the result as the issuer only has one outstanding benchmark,” said a syndicate official at one of the leads. “More and more people now are getting comfortable with buying the name and are keen on this kind of rare exposure (French residential home loans in Brittany).

“This is a very positive signal looking forward. The change into OH will obviously speed up the process of penetration of the name into the investor base.”

He said that he expects the issue to benefit from another round of momentum in the secondary market.

The last 10 year French benchmark was a Eu1.5bn 10 year for CM-CIC Covered Bonds that was priced at 85bp over mid-swaps on 8 March and was said to be at 77bp this week. One banker said that Crédit Mutuel Arkéa looked cheap compared to that, and also a recent Eu600m January 2021 tap from Caisse de Refinancement de l’Habitat at 65bp, but that the differential was reasonable given its lower name recognition.

Crédit Mutuel Arkéa’s 10 year came a day after the first 10 year deal since CM-CIC’s, for ABN Amro Bank issued yesterday. The Dutch bank closed books at 1100 CET with orders totalling well above Eu4bn for a Eu2bn 10 year issue that was priced at 75bp above mid-swaps.

The issue was absorbed very well by the market, according to bankers at the leads, who included ABN Amro, BNP Paribas, LBBW and Société Générale.

“The market was ready for the transaction and didn’t seem to be affected by all the turbulent events going on,” said one. “There was a window and ABN Amro made good use of it.

“ABN Amro hasn’t issued for a long time, so it’s basically a new issuer for the market. It’s a positive signal from investors that they were jumping into the transaction.”

He said that a combination of factors led to the success of the deal, including the timing, a relatively empty pipeline, and a lack of recent supply at the long end of the curve. Bankers at the leads said the pricing, which came after guidance of the 77bp area, was fair for issuers and investors.

Germany and Austria took 34.2%, France 19.3%, the Benelux 17.1%, Nordics 12.2%, the UK 10.4%, southern Europe 3%, Switzerland 0.9%, and others 2.9%. Banks took 41.2%, insurers and pension funds 24.3%, funds 21.1%, central banks and agencies 9.6%, and others 3.8%.

Nordea Eiendomskreditt launched its first dollar issue yesterday, a $2bn three year issue split into $1bn fixed and floating rate tranches. The fixed rate tranche was priced at 42bp over mid-swaps and the floater at 42bp over three month dollar Libor, in line with guidance.

The issuer is the Norwegian issuer of the Nordea group and its cover pool comprises Norwegian residential mortgages. It has previously focused on the domestic Norwegian krone market.

The 144A issue comes after $2bn deals for fellow Norwegian DnB Nor Boligkreditt and Sweden’s Swedbank Hypotek last week. Bank of America Merrill Lynch, Barclays Capital, Deutsche Bank and JP Morgan were Nordea’s leads.