A Eu500m maximum five year mortgage Pfandbrief from covered bond newcomer ING-DiBa was warmly received this (Wednesday) morning, with order books more than twice subscribed despite tight pricing.

The deal was launched into a market described by bankers as being still shaky despite a positive opening after the Greek government won a vote of confidence late yesterday (Tuesday).

A syndicate banker away from the transaction said there was no clear direction in the market, with the Bund at one stage selling off but then moving around 20bp higher, and peripherals taking a bad hit in the course of the morning.

Today represented a small issuance window, with holidays in Spain and Germany tomorrow (Thursday) rendering it unlikely that other new issues would be launched this week, he added.

But syndicate officials away from ING-DiBa’s transaction were positive about the trade, citing a high level of demand and tight pricing.

Leads Commerzbank, HSBC, ING and UniCredit are pricing the issue at 14bp over mid-swaps on the back of an order book exceeding Eu1bn, according to a syndicate banker on the deal. The re-offer spread represents the tight end of guidance of the 15bp over area, which in turn followed a whisper of the mid to high teens that served as the basis for gathering indications of interest earlier this morning.

The order books were open for one hour, with more than 60 accounts placing orders, according to the syndicate official at one of the leads. Distribution statistics were not available at the time of going to press.

He said it was to be expected that the transaction would go well given that the issuer is a “very strong bank” with a cover pool comparable in quality to that of Deutsche Postbank’s.

The cover pool backing ING-DiBa’s mortgage Pfandbriefe comprises solely German prime residential mortgages and has been assigned a collateral score of 4% by Moody’s, second only to Deutsche Postbank among German mortgage cover pools.

A syndicate banker away from the leads said the transaction was “brilliant”.

“It offers nice diversification, and reminds me a little bit of Deutsche Postbank,” he said, adding that it was a shame that the issuer was not able to offer a Eu1bn-plus benchmark.

The assets in ING-DiBa’s cover pool amounted to Eu630m as at the end of April.

At 14bp over mid-swaps the pricing was very good, said the syndicate official, comparing it with a re-offer spread of 10bp over for a Eu3bn five year transaction from FMS Wertmanagement, the government backed wind-down entity of Hypo Real Estate, that was sold at the end of May.

The level on ING-DiBa’s debut compares with pricing of 35bp over for a Eu500m five year issue from Aareal Bank on 7 June that was the last mortgage Pfandbrief to hit the market.

Another syndicate official away from the leads said ING-DiBa’s deal was “solid”.

“It’s a rare name and was well prepared,” he said, adding that the pricing was justified by the level of demand, even if at first glance it was among tighter Pfandbrief levels.

The transaction comes after a roadshow that ended last week.