--- title: "Focus on Credit: Primary market update on EUR benchmark bank bonds Q3 2026" url: https://www.helaba.com/en/focus-credit-primary-market-update-eur-benchmark-bank-bonds-q3-2026 type: dd_research language: en updated: 2026-10-06 keywords: Credit, Credit Special --- # Focus on Credit: Primary market update on EUR benchmark bank bonds Q3 2026 Focus on: Credit 5 October 2026 Helaba Research © Helaba | Research | 5 October 2026 1 of 6 EUR Benchmark Bank Bonds: Primary Market Q3 2026 Brisk issuance activity in senior unsecured issues Despite the summer lull, the primary market for senior unsecured bank bonds in the EUR benchmark format proved extremely buoyant in the third quarter of 2026. The total volume issued was around EUR 47 billion, which was 15 per cent higher than in the third quarter of 2025, which was already strong. This figure even exceeded the average for third quarters over the past six years by 40 per cent. In the first nine months of this year, the volume of new issues amounted to around EUR 180 billion, setting a new record despite the war in Iran that broke out at the end of February. The subdued primary market activity in weeks 8 to 15 was more than offset by subsequent transactions and the year's strong start. Activity in the senior non-preferred bonds (SNP bonds) segment was particularly strong in the most recent quarter. At around EUR 31 billion, issuance volume was 27 per cent higher than in the same quar- ter of the previous year, and 62 per cent above the six-year average. In contrast, the volume of preferred bond issues in Q3 2026 was around EUR 16 billion, 4 per cent below the previous year but 8 per cent above the six-year average. In our view, the brisk issuance activity is primarily due to the high number of maturities, which will peak in 2026. Against a backdrop of news dominated by trade conflicts and military confrontations, issuers have taken advantage of favourable market conditions to implement their issuance plans at an early stage this year. The high level of maturities is due, among other things, to the fact that SNP bonds, introduced following the financial crisis, are now firmly established in the market, with a balanced rhythm between new issues and maturities in this segment. SNP bonds accounted for 66% of the total issuance volume in the third quarter of 2026. We regard the average oversubscription ratio of 2.9x in the first nine months of 2026 as an indication that regulatory-driven SNP transactions continue to meet robust investor demand. This has more than fulfilled our expectation that SNP issues would account for well over half of the total issuance volume for the year as a whole (see our Primary Market Update of 6 January 2026). Dr Susanne Knips Senior Credit Analyst T 069/91 32-32 11 EUR Benchmark transactions\* Q3 2026: Brisk issuance activity continues EUR benchmark issuance volume (fixed and variable rate, covered and uncovered), billion euros \*Issuance volume of at least 500 million euros Sources: Bloomberg, Helaba DCM, Helaba Research 0 50 100 150 200 250 300 350 400 0 50 100 150 200 250 300 350 400 2019 2020 2021 2022 2023 2024 2025 2026 Q1 Q2 Q3 Q4 Focus on: Credit – Primary Market Update on Bank Bonds © Helaba | Research | 5 October 2026 2 of 6 Banks from the United Kingdom, the United States and Canada, in particular, took full advantage of the favourable interest rate environment. Furthermore, French banks, which are traditionally very active in the capital markets, had a strong presence once again. By contrast, German issuers have shown a comparatively low need for refinanc- ing so far this year. Overall, issuance ratings remained encouragingly stable, thereby underlining the high quality of the institutions’ balance sheets. The green label was also used more extensively, rising from 19 per cent of is- suance volume in 2025 to 26 per cent so far this year. Therefore, we maintain our forecast of a new issue volume of EUR 210 billion for senior unsecured bank bonds in the EUR benchmark format for the whole of 2026 (see our Primary Market Update of 2 April 2026). This strong year for issuance continues to be underpinned by substantial maturities. These are expected to remain at a high level in 2027 as well. For SNP issues, regulatory requirements remain a key influencing factor. While the minimum quotas have been met, the high level of maturities is now also the main driver of issuance activity in this segment. We expect the share of SNP issues to remain well over half of total issuance. However, the ongoing geopolitical and macroeconomic uncertainties mean that the timing of new issues remains a key challenge for issuers. Covered bonds: Taking a breather for now – but then! Traditionally, the third quarter begins with a few final transactions before the market goes into summer recess. Although this year's break was the third-longest on record at 47 days, what happened afterwards was remarkable in many respects: The list of issuers that typically return to the market after an extended absence is mainly drawn from established European core covered bond markets. DBS's participation on 17 August can certainly be interpreted as a positive sign of the ongoing internationalisation of the covered bond market. However, the subsequent trading volume has eclipsed every previous Q3 issuance launch. In the 27 trading days leading up to the Covered Bond Congress in Seville, 53 tranches totalling EUR 41 billion were placed across 19 countries. This propelled the year-to-date volume to levels last seen in 2022 and 2023, years characterised by various one-off effects. At the end of those years, the figures stood at EUR 206 billion and EUR 193 billion respectively. In our publication The Spread Paradox in the Covered Bond Market, we noted that the capacity for absorption on the investor side is gradually waning. While the most recent transactions were completed without any major is- sues, oversubscription ratios were often lower than usual, and/or the difference between the initial price and the final price was smaller, or the new issue premiums were set higher from the outset. Generally speaking, we interpret the high level of issuance activity as a collective 'better safe than sorry' ap- proach, so we expect Q4 2026 to be rather quiet. Although there was general talk of continued willingness to is- sue at the annual Covered Bond Congress, we would be surprised if the Q4 2025 volume (EUR 17.35 billion) were to be matched, particularly given the increasingly challenging broader economic outlook: While yields on French government bonds continue to reach new heights, the outcome of the regional elections in Germany has signifi- cantly dampened the appetite for reform. Combined with persistent inflationary pressure via commodity prices and well-known geopolitical crises, it is probably only a matter of time before secondary market spreads for cov- ered bonds, which remained stable until recently, begin to widen. We mentioned the initial signs of softening in the aforementioned publication on 17 September. Since then, this impression has strengthened. While the scale of the move lags behind the 'wave' seen at the end of Q1, the difference lies in the breadth of the market. At the end of Q1, it was mainly more expensive covered bonds that fell in price; French and Italian issues, by contrast, outperformed. Currently, however, no sub-market is immune to this trend. That is the broad picture. However, we do not want to overlook some notable details from the third quarter: Florian Hillenbrand, CFA Senior Covered Bond Analyst T 069/91 32-40 79 Focus on: Credit – Primary Market Update on Bank Bonds © Helaba | Research | 5 October 2026 3 of 6  Welcome back to the covered bond market, Luxembourg! The country now has a new issuer and a new cov- ered bond class: Lettres de Gage Hypothecaire. Banque et Caisse d’Epargne de l’Etat Luxembourg (Spuer- keess) has issued a benchmark covered bond backed by mortgages for the first time. Until now, the Luxem- bourg covered bond market consisted of securities backed by public assets. This can genuinely be de- scribed as a Luxembourg covered bond, as a bank originally established in Luxembourg is conducting do- mestic mortgage business and refinancing it via Lettres de Gage in Luxembourg. Previous issuers were ei- ther subsidiaries of German banks or purely financial vehicles – our older readers may remember Dr Wolf- gang Schuppli.  The trend towards multi-tranche transactions continues: The third quarter saw a further six such transac- tions. In August, Crédit Agricole even placed three tranches – a combination of three fixed- and floating-rate tranches, as well as a 10-year tranche. In the booklet accompanying the 39th ECBC Plenary Meeting in Se- ville, we published a longer article setting out our support for multi-tranche transactions.  Record number of issuing countries: 2026 is also on course to set a new record in terms of the number of countries issuing covered bonds. With the addition of the new issues from Luxembourg, the total now stands at 26 countries, surpassing last year's record. 1. Senior unsecured bonds Q3 2026: Market conditions remain favourable UK and US banks capitalise on favourable interest rate environment Cumulative EUR benchmark issuance volume, EUR billion EUR benchmark issuance volume 9M 2026 by country Sources: Bloomberg, Helaba DCM, Helaba Research Sources: Bloomberg, Helaba DCM, Helaba Research 0 50 100 150 200 250 0 50 100 150 200 250 2019 2020 2021 2022 2023 2024 2025 2026 Q1 H1 9M FY GB 14% US 12% FR 12% CA 7% ES 7% NL 6% IT 5% DE 5% CH 4% AT 3% SE 3% JP 3% other 19% Focus on: Credit – Primary Market Update on Bank Bonds © Helaba | Research | 5 October 2026 4 of 6 Non-preferred shares account for a high 66% Extensive use of regulatory call options EUR benchmark issue volume by seniority, billion EUR EUR benchmark issuance volume by repayment type, billion EUR Sources: Bloomberg, Helaba DCM, Helaba Research Sources: Bloomberg, Helaba DCM, Helaba Research 0 50 100 150 200 250 0 50 100 150 200 250 2019 2020 2021 2022 2023 2024 2025 9M 26 Preferred Non-preferred 0 50 100 150 200 250 0 50 100 150 200 250 2019 2020 2021 2022 2023 2024 2025 9M 26 Bullet Fixed-to-float Maturities of 3 to 7 years dominate Stable rating mix EUR benchmark issue volume by maturity, billion EUR EUR benchmark issue volume by rating\*, billion EUR Sources: Bloomberg, Helaba DCM, Helaba Research \*Moody’s rating at the time of issue Sources: Bloomberg, Helaba DCM, Helaba Research 0 50 100 150 200 250 0 50 100 150 200 250 2019 2020 2021 2022 2023 2024 2025 9M 26 1Y-3Y 3Y-5Y 5Y-7Y 7Y-10Y 10Y-15Y >15Y 0 50 100 150 200 250 0 50 100 150 200 250 2019 2020 2021 2022 2023 2024 2025 9M 26 AA A BBB BB other Proportion of green issues on the rise Proportion of floating-rate issues on the decline again EUR benchmark issuance volume by ESG criteria, billion EUR EUR benchmark issuance volume by coupon type, billion EUR Sources: Bloomberg, Helaba DCM, Helaba Research Sources: Bloomberg, Helaba DCM, Helaba Research 0 50 100 150 200 250 0 50 100 150 200 250 2019 2020 2021 2022 2023 2024 2025 9M 26 Classic Green Social Sustain 12% 12% 24% 25% 26% 27% 28% 23% 0 50 100 150 200 250 0 50 100 150 200 250 2019 2020 2021 2022 2023 2024 2025 9M 26 Fix Floating Focus on: Credit – Primary Market Update on Bank Bonds © Helaba | Research | 5 October 2026 5 of 6 2. Covered bonds Q3 26: EUR 164 billion, well above expectations Maturity volume showing an upward trend Cumulative EUR benchmark issue volume, billion EUR EUR benchmark maturity volume by country, in billions of EUR Sources: Bloomberg, Helaba Research \*Volume: ‘26 EUR 156 billion, ‘27 EUR 183 billion, ‘28 EUR 164 billion Sources: Bloomberg, Helaba Research 8 12 16 2 2 8 12 16 2 2 2 18 2 1 2 2 2 21 2 22 2 23 2 2 2 25 2 26 1 H1 M 5 1 15 2 25 3 35 5 5 1 15 2 25 3 35 5 S T C rau GE T E ES 2 26 2 27 2 28 German Pfandbriefe account for the largest share Maturity profiles slightly longer again EUR benchmark issuance volume Q1 2026 by country EUR benchmark issuance volume by maturity, % Sources: Bloomberg, Helaba Research Sources: Bloomberg, Helaba Research GE 18 16 C 1 ES 6 5 L 5 T S GB T 2 6 8 1 2 21 2 22 2 23 2 2 2 25 2 26 2 3 5 6 1 11 Maturities\* will peak in 2026 EUR benchmark maturity volume, billion EUR \*Slightly different definition compared with new issues Sources: Bloomberg, Helaba Research 0 50 100 150 200 250 300 0 50 100 150 200 250 300 2023 2024 2025 2026 2027 2028 2029 Focus on: Credit – Primary Market Update on Bank Bonds © Helaba | Research | 5 October 2026 6 of 6 Publisher and Editor Helaba Research Editor: Dr Stephan Brand Publisher: Dr Gertrud Rosa Traud Chief Economist / Head of Helaba Research Neue Mainzer Str. 52–58 60311 Frankfurt am Main Tel. 069/91 32-20 24 Website: http://www.helaba.de Disclaimer This publication has been prepared with the utmost care. However, it contains only non-binding analyses and forecasts regarding current and future market con- ditions. The information is based on sources that we consider reliable, but we cannot guarantee its accuracy, complete- ness or timeliness. All information con- tained in this publication is for informa- tional purposes only. It should not be construed as an offer or recommendation for investment decisions. Aaa ratings still the norm Sustainable covered bonds: somewhat out of the spotlight EUR benchmark issuance volume by rating\*, % Issuance volume by ESG criteria and other, billion EUR \*Moody’s rating at the time of issue Sources: Bloomberg, Helaba Research Sources: Bloomberg, Helaba Research 75 8 85 5 1 2 17 2 18 2 1 2 2 2 21 2 22 2 23 2 2 2 25 2 26 aa a1 a2 1 2 3 5 1 15 2 25 5 1 15 2 25 2 18 2 1 2 2 2 21 2 22 2 23 2 2 2 25 2 26 Classic Green Social Sustainable Sign in for our newsletters here: https://news.helaba.de/research/ The third quarter is set to break records for both covered and uncovered bank bonds, despite the long summer break. Senior unsecured issues are now being driven by high maturities in the non-preferred segment. The internationalisation of covered bonds is growing.