Euro

A new burst of issuance hit the covered bond market this (Thursday) morning after a breather yesterday, with GCE Covered Bonds and UniCredit Bank Austria launching new deals and Caja Madrid offering an increase of a 2014 issue.

GCE Covered Bonds announced a mandate for a new covered bond this (Wednesday) morning, but otherwise the primary market was quiet after yesterday’s five euro benchmarks and one dollar issue.

Yorkshire Building Society launched its first benchmark covered bond since 2007 yesterday (Tuesday), a Eu600m five year Regulated Covered Bond that built on improving sentiment towards the UK, according to the issuer.

Banco Pastor yesterday (Tuesday) became the seventh Spanish issuer to tap the covered bond market in just under three weeks, and the issuer told The Cover that it was “delighted” with the transaction and suffered no ill effects from one lead manager dropping out.

Banco Popular Español launched an exchange offer yesterday (Monday) featuring the first ever swap of senior unsecured debt into covered bonds.

Five issuers piled into the euro covered bond market in one of its busiest ever sessions this (Tuesday) morning to take advantage of supportive conditions. Supply included the first deals in a maturity longer than 10 years since June.

More peripheral covered bonds are being mulled for launch in the coming week, but any further issuance by lower ranked credits will have to contend with a weakening of demand, as hinted at by sub-Eu1bn deals for Italy’s Banco Popolare and Spain’s Bankinter yesterday (Thursday). Meanwhile, Compagnie de Financement Foncier has completed a third foray into the US 144A market.

Banco Popolare and Bankinter are bookbuilding for new issues today (Tuesday) amid signs that investor appetite for second tier issuers from peripheral countries could be flagging after a busy two weeks, particularly from Spain.

Caja Madrid yesterday (Tuesday) priced the biggest Spanish benchmark covered bond since the segment’s reopening this autumn, and the issuer told The Cover that several aspects of the transaction were encouraging, including its resilience to weakening market conditions on the day.

Dexia Municipal Agency launched an offer to exchange Eu14.5bn of obligations foncières into three new, longer dated benchmarks today (Wednesday) in the first test of such liability management exercises in the covered bond market.

Nationwide Building Society priced its first benchmark covered bond in three years yesterday (Tuesday), a Eu1.25bn five year transaction that the issuer said lays a strong foundation for its future activity in the market.