UBS and UniCredit showed the variety of options available to issuers in the covered bond market with the tightest and widest priced issues of the week, capturing differing investors at the short and long ends of the curve.

UBS priced a Eu1bn April 2015 benchmark at 27bp over mid-swaps. Leads BayernLB, BBVA, Danske, Deutsche Bank, Société Générale and UBS had gone out with initial guidance of the 30bp over mid-swaps area and built a book of some Eu2bn.

Armin Peter, head of covered bond business and syndicate at UBS in London, said that, with the Swiss issuer’s covered bond curve having been probably the most stable in the asset class this year, the new issue appealed to those investors looking for a safe haven.

“At 18%, the covered bond spread to senior unsecured spread ratio is a record low, so this is not so much something for credit buyers,” he said. “But with swap spreads back at around 2008 levels, the spread of 109bp over Bunds is one of the cheapest ever and it appeals to rates buyers taking it as a swap proxy.

“That proved attractive to around 100 investors. It was very nice to see around 20 new investors in our name, including some large tickets.”

Peter said that the book was less driven by German demand than previous UBS deals, with Nordic and UK interest more prominent.

Germany took 31%, the Nordics 29%, the UK and Ireland 15%, Switzerland 5%, France 5%, Benelux 4%, and others 11%. Banks took 36%, managed funds 27%, central banks 18%, sovereigns and supranationals 7%, private banks 5%, insurance companies 5%, and corporates 2%.

Italy’s UniCredit sold a Eu1bn 10 year OBG via BNP Paribas, HSBC, Société Générale, UBS and UniCredit. They priced the deal at 215bp over mid-swaps, the tight end of guidance of 215bp-220bp over.

“This confirms the broad market access for UniCredit and the OBG asset class, also in the most difficult market environments,” said a source close to the issuer. “Considering the market turmoil the pricing was only marginally wider than previous deals.”

UniCredit’s last long dated transaction, a 12 year, was priced at 165bp over and Intesa Sanpaolo’s last 10 year at 185bp over. The pricing was roughly flat to BTPs and seen as the tightest ever level for an OBG versus Italian government bonds.

Some 50 accounts participated in the issue, with funds taking 61%, central banks 20%, insurance companies 11%, and banks 9%. Germany was allocated 41%, the Nordic region 20%, Italy 18%, France 12%, Austria and Switzerland 4%, the UK/Ireland 3%, and others 3%.