--- title: "Focus on Credit: Primary market update on covered bonds and senior unsecured bank bonds Q3 2025" url: https://www.helaba.com/en/focus-credit-primary-market-update-covered-bonds-and-senior-unsecured-bank-bonds-q3-2025 type: dd_research language: en updated: 2026-09-28 keywords: Credit, Credit Special --- # Focus on Credit: Primary market update on covered bonds and senior unsecured bank bonds Q3 2025 Focus on: Credit 6 October 2025 Research & Advisory © Helaba | Research & Advisory | 6 October 2025 1 of 6 EUR benchmark bank bonds: Primary market update Q3 2025 Senior Unsecured issuance continues record run The primary market for senior unsecured bank bonds is on course to break records. Despite the traditionally quiet summer months, around EUR 41 billion of bonds were issued in the third quarter of 2025. While this represents a 15% decrease compared to the third quarter of last year, it is a 25% increase compared to the average over the past ten years. In the first nine months of 2025, the volume of new issues reached a new peak of €178 billion, repre- senting a 13% increase on the already impressive previous year and a 30% increase on the average for the last ten years. The transaction volume of EUR 182 billion for the whole of 2024 has almost been reached already. The main driver of this active issuance is the high volume of maturities, which will continue into 2026. TLTRO refi- nancing, on the other hand, does no longer play a significant role this year, as the final tranche of the programme was repaid to the ECB in December 2024. Banks from the US and the UK have been making intensive use of the favourable refinancing conditions on the euro market, particularly in the first half of the year. The major French banks are among the most active players on the capital market, a fact they have proven once again this year. Non-preferred issues remain dominant. In the third quarter of 2025, their share of total issuance volume remained stable at around 60%. We attribute the brisk activity in this regulatory-driven segment to refinancing require- ments that are now equally high. While issues in the first few years after the introduction of this bond class were dominated by the need to build up liable capital, SNP bonds have long since become established. This means that, in addition to liable capital, maturities are also a determining factor. Dr Susanne Knips Senior credit analyst T 069/91 32-32 11 EUR benchmark issues\* Q3 2025: Another strong year EUR billions (fixed and variable rate, covered and senior unsecured issuance volume) \* Issuance volume of at least EUR 500 million Sources: Bloomberg, Helaba DCM, Helaba Research & Advisory 0 50 100 150 200 250 300 350 400 0 50 100 150 200 250 300 350 400 2018 2019 2020 2021 2022 2023 2024 2025 Q1 Q2 Q3 Q4 Focus on: Credit – Primary market update bank bonds © Helaba | Research & Advisory | 6 October 2025 2 of 6 Our expectation that 2025 will be another strong year for the issuance of senior unsecured bank bonds in the EUR benchmark format has been confirmed. Following the strong primary market year-to-date, we now expect the esti- mated issuance volume of around EUR 200 billion for 2025 as a whole to be exceeded (see our Primary Market Update of 7 January 2025). The main driver of this are strong maturities. Due to the further increase in maturities in 2026, pre-financing is also likely to play an important role. Added to this is the rising demand for credit amid lower interest rates. Regulatory requirements continue to be an important factor for SNP issues. Although the minimum requirements for total regulatory capital have been reached, high maturities are also now decisive and are leading to refinancing. However, getting the timing right remains a challenge in the volatile market environ- ment. Covered bonds as an anchor of stability in a turbulent Q3 From January to September 2025 inclusive, around EUR 138 bn in covered EUR bench- mark bonds were issued. The issues were spread across a total of 170 transactions. Of these, EUR 36 bn in 44 transactions were accounted for in the third quarter. The second quarter ended with a veritable flurry of transactions, resulting in the highest market activity in June since the beginning of the jumbo covered bond era. However, after Santander's dual-tranche transaction on 7 July, the frenzy was over, and issuers took a six-week summer break. While these six weeks were uneventful on the covered bond market, they were extremely turbulent in French domestic politics. The cascade began with the presentation of the Bayou government's fiscal consolidation plan and escalated on 25 August with the announcement of a vote of confidence for 8 September. The feedback on the Pfandbrief market was not long in coming: The summer break was abruptly declared over, and August became the most active month since 2011 with EUR 13bn in new issues. Market uncertainty, funding pressure on some issuers – particularly from France – and, ultimately, the large number of transactions in a short period of time led to some suboptimal transaction processes. Although only five of the 170 new issues currently show negative after-market performance, all five originate from the weeks between the end of the summer break and 4 September, the last day before the vote of confidence on which transactions were still placed. Average oversubscription rates fell to just under 2x during this phase – the lowest for the whole year. Even with new issue premiums of up to 4bp, indi- vidual transactions could only be placed with effort. However, the primary market rebounded very quickly follow- ing the expected end of the Bayou government and the appointment of Sébastien Lecornu as the new prime minis- ter. With oversubscription rates rising again (2.5x), new issue premiums fell to the 0-1bp range. Surprisingly, there were hardly any carry-over effects from September to August in the net view: with EUR 20bn in new issues, the September of 2025 was historically one of the more active ones. The new issues in 2025 came from a total of 25 countries, representing the widest market coverage to date. Until the summer break, we had assumed that a new high would be reached with 24 countries. The fact that the number rose to 25 at the beginning of September with the Estonian Luminor Bank came as a positive surprise. In addition, on 25 September, Turkey's Vakifbank announced that its board had authorised the issue of up to EUR 500mn in mortgage covered bonds, making it the 26th covered bond country for 2025. In terms of country distribution on the primary market, German Pfandbriefe (EUR 30bn) slightly extended their lead over French covered bonds (EUR 29bn). Norwegian (EUR 9bn) and Canadian covered bonds (EUR 8bn) follow at a considerable distance. Among the larger countries, covered bonds from France (72% of FY target; EUR -11bn), Austria (68%; EUR -2bn), Canada (63%; EUR -5bn), Italy (58%; EUR -4bn) and Spain (65%; EUR -2bn). French banks appear to have chosen the safe option and covered their most urgent funding needs before the vote of confidence, which makes us somewhat pessimistic about issuance activity for the rest of the year. Canadian banks regularly show a high affinity for issuing in the third and fourth quarters due to their off-calendar fiscal year. The most recent primary market activities of Canadian issuers were denominated in GBP, raising the question of whether this is an addition to or a substitute for EUR issuance. However, Canadian banks have always issued a Florian Hillenbrand Senior covered bond analyst T 069/91 32-40 79 Focus on: Credit – Primary market update bank bonds © Helaba | Research & Advisory | 6 October 2025 3 of 6 minimum of EUR 5bn in the latter half of the year, regardless of activity in other currencies. To date, only EUR 2.5bn has been issued. Overall, our full-year forecast of EUR 160bn is likely to be narrowly missed. We currently expect around EUR 155bn. In the previous quarterly review, we mentioned the strong focus on the five-year maturity band, which accounted for 36.5% of the traded volume — the highest share since the beginning of the jumbo era. The choice of maturi- ties in the third quarter reduced the share slightly to 34.2%, but due to the steepness of the yield curve and fiscal, geopolitical and trade policy uncertainties, this maturity segment remains in focus. Conversely, the fact that the market for 5-year covered bonds is still not saturated can be interpreted as an encouraging sign for the last quar- ter of 2025 and preparations for 2026. 1. Senior Unsecured Bonds Q3 2025: Record level in 9M 2025 French banks in a leading position EUR billions (cumulative benchmark issuance volume) EUR billions (benchmark issuance volume by country, 9M 2025) Sources: Bloomberg, Helaba DCM, Helaba Research & Advisory Sources: Bloomberg, Helaba DCM, Helaba Research & Advisory 0 20 40 60 80 100 120 140 160 180 200 220 0 20 40 60 80 100 120 140 160 180 200 220 2018 2019 2020 2021 2022 2023 2024 2025 Q1 H1 9M FY FR 13% US 11% GB 7% CA 6% DE 6% EN 5% IT 5% GE 5% NE 4% ES 4% CH 3% SW 3% other 28% Medium-term durations dominate maturities Rating mix with positive trend EUR billions (benchmark issuance volume by maturity) EUR billions (benchmark issuance volume by rating\*) Sources: Bloomberg, Helaba DCM, Helaba Research & Advisory \* Moody’s rating at time of issuance Sources: Bloomberg, Helaba DCM, Helaba Research & Advisory 0 20 40 60 80 100 120 140 160 180 200 220 0 20 40 60 80 100 120 140 160 180 200 220 2018 2019 2020 2021 2022 2023 2024 9M 25 1Y-3Y 3Y-5Y 5Y-7Y 7Y-10Y 10Y-15Y 0 20 40 60 80 100 120 140 160 180 200 220 0 20 40 60 80 100 120 140 160 180 200 220 2018 2019 2020 2021 2022 2023 2024 9M 25 AA A BBB BB other Focus on: Credit – Primary market update bank bonds © Helaba | Research & Advisory | 6 October 2025 4 of 6 Share of Non-preferred stable at 61% Share of regulatory call option declining EUR billions (benchmark issuance volume by payment rank) EUR billions (benchmark issuance volume by maturity type) Sources: Bloomberg, Helaba DCM, Helaba Research & Advisory Sources: Bloomberg, Helaba DCM, Helaba Research & Advisory 0 20 40 60 80 100 120 140 160 180 200 220 0 20 40 60 80 100 120 140 160 180 200 220 2018 2019 2020 2021 2022 2023 2024 9M 25 Non-preferred Preferred 0 20 40 60 80 100 120 140 160 180 200 220 0 20 40 60 80 100 120 140 160 180 200 220 2018 2019 2020 2021 2022 2023 2024 9M 25 Fixed-to-float Bullet Share of green issuance declining High level of maturities\* in 2025 EUR billions (benchmark issuance volume by ESG instrument indicator) EUR billions (benchmark maturity volumes) Sources: Bloomberg, Helaba DCM, Helaba Research & Advisory \* Leicht abweichende Abgrenzung gegenüber den Neuemissionen Sources: Bloomberg, Helaba Research & Advisory 0 20 40 60 80 100 120 140 160 180 200 220 0 20 40 60 80 100 120 140 160 180 200 220 2018 2019 2020 2021 2022 2023 2024 9M 25 Classic Green Social Sustain 10% 12% 12% 24% 25% 26% 22% 27% - 20 40 60 80 100 120 140 160 180 200 220 240 260 0 20 40 60 80 100 120 140 160 180 200 220 240 260 2022 2023 2024 2025 2026 2027 2028 Floating-rate issues remain less attractive EUR billions (benchmark issuance volume by coupon type) Sources: Bloomberg, Helaba DCM, Helaba Research & Advisory 0 20 40 60 80 100 120 140 160 180 200 220 0 20 40 60 80 100 120 140 160 180 200 220 2018 2019 2020 2021 2022 2023 2024 9M 25 Fix Floating Focus on: Credit – Primary market update bank bonds © Helaba | Research & Advisory | 6 October 2025 5 of 6 2. Covered Bonds Aaa ratings still the standard Sustainable covered bonds: slight increase EUR benchmark issue volume by rating\* in % Issue volume according to ESG criteria and other criteria in EUR billion \* Moody's rating at issue Sources: Bloomberg, Helaba Research & Advisory Sources: Bloomberg, Helaba Research & Advisory 75 80 85 0 5 100 2020 2021 2022 202 202 2025 aa a1 a2 a ndere 0 50 100 150 200 250 0 50 100 150 200 250 2018 201 2020 2021 2022 202 202 2025 lassic reen ocial ustainable Issue volume slightly below expectations Maturity volume with upward trend (2025 EUR 140 bn; ‘26 EUR 156 bn; ‘27 EUR 183 bn) EUR Benchmark Cumulative issuance volume in EUR billion EUR benchmark maturity volume by country in EUR billion Sources: Bloomberg, Helaba Research & Advisory Sources: Bloomberg, Helaba Research & Advisory 0 0 80 120 1 0 200 2 0 0 0 80 120 1 0 200 2 0 2018 201 2020 2021 2022 202 202 2025 1 1 M 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 2025 2026 2027 2028 Pfandbriefe currently account for the largest share of new issues 5-year term – more popular than ever EUR benchmark issuance volume by country EUR benchmark issuance volume by maturity in % Sources: Bloomberg, Helaba Research & Advisory Sources: Bloomberg, Helaba Research & Advisory 22 20 7 thers 2 0 20 0 0 80 100 0 20 0 0 80 100 2021 2022 202 202 2025 2 - 5 - 10 11 Focus on: Credit – Primary market update bank bonds © Helaba | Research & Advisory | 6 October 2025 6 of 6 Publisher and editor Helaba Research & Advisory Editor Stefan Rausch Corporate Research & Advisory Publisher Dr Gertrud Rosa Traud Chief Economist / Head of Research & Advisory Neue Mainzer Str. 52-58 60311 Frankfurt am Main Germany T +49 69/91 32-20 24 Internet: https://www.helaba.com/int/ Disclaimer This publication was very carefully re- searched and prepared. However, it con- tains analyses and forecasts regarding current and future market conditions that are for informational purposes only. The data are based on sources that we con- sider reliable, though we cannot assume any responsibility for the sources being accurate, complete, and up to date. All statements in this publication are for in- formational purposes. They must not be taken as an offer or recommendation for investment decisions. Sign up for our newsletter here: https://news.helaba.de/research/ Transaction volume for senior unsecured bonds already at previous year's level after 9M 2025. Market for 5-year covered bonds still not saturated. Turkey as the 26th covered bond country in 2025 already seems a done deal.