The euro senior unsecured and covered bond markets proved buoyant in the wake of the ECB’s announcement of sovereign QE and Greek elections, although blackouts constrained supply and questions remain over the prospect of Nordic banks accessing the market after results.

The sovereign QE programme unveiled by the European Central Bank yesterday (Thursday) afternoon is expected to stimulate new issuance next week after having surprised market participants with its size and further buoyed an already tightening market.

Fourteen new euro benchmarks since Monday made this one of the busiest ever weeks in covered bonds, while issuance in the senior unsecured market was similarly brisk, as financial institutions took advantage of buoyant market conditions to raise funding.

Financial institutions issuance picked up through the first week of the year, helped by issuers offering healthy new issue premiums, and activity is expected to remain high next week, especially with uncertainty seen increasing as January progresses.

The recent CBPP3-inspired momentum of the covered bond market appeared to have dried up over the past week, with demand for a Eu1bn 10 year OP Mortgage Bank benchmark last Friday (21 November) falling short of expectations amid other senior and covered bond issues being pulled.

Spreads on Danish one year ARM bonds widened by up to 10bp over the first three days of the latest refinancing auction season this week and bid-to-cover ratios hit lows, despite a sharp fall in supply, with market participants struggling to remember such turbulent conditions and understand the moves.

DNB Boligkreditt priced a Eu1.25bn (Nkr10.2bn) five year covered bond at 3bp through mid-swaps on Monday, making for a favourable if modest return for the Norwegian issuer after an absence of 10 months, during which it has progressively tapped an FRN up to Eu850m and raised a record amount domestically.

Danske Bank priced a Eu1bn (Dkr7.45bn) short five year covered bond at 2bp through mid-swaps on Wednesday, making it the first Nordic euro benchmark covered bond to have been priced through mid-swaps since the onset of the financial crisis.

Nykredit Realkredit launched an inaugural senior unsecured Eu500m five year floating rate note on Tuesday, the first time the Danish financial group has issued a euro senior unsecured instrument out of its mortgage credit institution rather than Nykredit Bank.

UBS and National Australia Bank this week successfully reopened the euro financial institutions and covered bond markets, respectively, but overall the euro primary market was slow off the mark after the summer recess.