Raiffeisenlandesbank NÖ-Wien this (Monday) morning announced a mandate for a roadshow in connection with an inaugural mortgage issue to provide a glimpse of a late summer resumption of primary market-related benchmark covered bond activity, with the market otherwise quiet.

The Austrian issuer, Raiffeisenlandesbank Niederösterreich-Wien, mandated BayernLB, Crédit Agricole, DZ Bank, HSBC, and UniCredit, as leads for the debut euro mortgage backed benchmark, which is due to follow a European roadshow. The benchmark is expected to be rated Aaa by Moody’s.

Raiffeisenlandesbank NÖ-Wien

The mandate announcement is the first public sign of preparations being made for benchmark covered bond activity after a summer lull, with no new issue having been launched since a Eu1.5bn seven year deal for ABN Amro Bank nearly two weeks ago. Deutsche Hypothekenbank on Wednesday (1 August) sold a Eu250m tap of a 2017 mortgage Pfandbrief.

The Austrian bank’s roadshow is due to begin in the second half of August.

Raiffeisenlandesbank NÖ-Wien already issues public sector covered bonds, according to a cover pool report dated end-December 2011, with some Eu600m outstanding, but it is understood to have yet to issue mortgage backed covered bonds. Its balance sheet totalled Eu32.1bn as of the end of 2011, according to the issuer.

Syndicate bankers this morning said the covered bond market was quiet, but that technical conditions are still supportive of high quality new issuance and that issuers would meet with demand for deals if they entered the market.

One said that primary market activity could pick up next week, although he is not aware of any new issue projects being lined up.

“I would recommend next week,” he said. “It doesn’t make sense to wait longer as the number of investors around won’t increase that much and waiting only means there is the risk of competing supply.”

Another syndicate banker said that any deal launched into the market would be successful on account of a striking imbalance between supply and demand, but that he is not aware of any issuer interest at the moment.

ECB president Mario Draghi on Thursday said that the central bank would buy government bonds in the secondary market, but only after EU countries had applied to one of the euro-zone’s rescue funds for help. His comments disappointed market participants, who had hoped for greater detail and more immediate action, although a syndicate official today said that on balance Draghi’s statement has since been seen more positively.