Domestic bid maintains covered market pace

The covered bond market showed no signs of exhaustion after heavy issuance last week. Danske Bank priced a Eu1.25bn deal backed by mortgage collateral yesterday afternoon (Tuesday) after NordLB had begun the week with a Eu1bn public sector Pfandbrief at 4bp over mid-swaps, proving that public Pfandbrief are almost alone in being able to price in the single digits over mid-swaps. Both new issues were bolstered by a strong domestic bid, and the primary market showed no signs of letting up the pace, with the Swedish Covered Bond Corporation opening books on a new March 2012 euro benchmark deal this morning.