HSH Nordbank came to the market yesterday (Thursday) with a Eu500m no-grow five year mortgage Pfandbrief, easily achieving an almost three times covered order book, with market conditions and more clarity on a new business model of the issuer cited as reasons for its success.

Frank Teuber, head of syndicate at HSH Nordbank, said that appetite for the transaction was overwhelming, with books of Eu1.42bn including more than 100 accounts built in less than an hour.

He noted HSH’s last transaction, a July 2014 priced at 25bp over mid-swaps last year, had been more difficult, as it was for its competitors.

“HSH is by far better placed in the market now,” he said. “This year we had a lot more clarity – on where we are and where we intend to be – to give investors.”

An investor that had had reviewed HSH’s credit story ahead of the transaction said that she had been impressed by the way in which the bank had turned itself around.

Leads DZ Bank, HSH, RBS and UniCredit priced the deal at 33bp over mid-swaps, at the low end of the guidance of the 35bp over area. The leads started taking IoIs in the morning at the high 30s.

“We could have done the deal even tighter, but given how frequently we are in the market, we wanted to give a few basis points of performance to the investors,” said Teuber, adding that pricing was difficult after such a long absence from the market.

“HSH has the possibility to refinance itself quite comfortably in using the German savings banks sector,” he added. “But we’re still a wholesale bank and we want to appear once or twice a year in international markets.

“It was not a liquidity issue,” he said.

He told The Covered Bond Report the issuer had picked a five year maturity because the cover pool’s underlying assets were mainly commercial real estate loans maturing in 3.9 to 4 years.

“We stick to the medium term maturity – three of five years – because of our cover pool,” he said.

Teuber noted the savings bank sector had a very strong bid on the transaction. Central banks and agencies took 22%, with that share including central banks from Asia and some from Europea but outside the euro-zone.

Banks took 43%, funds 24%, central banks and agencies 22%, corporates 6%, insurance companies 3%, and retail 2%. Germany was allocated 82%, Nordics 6%, Italy 4%, the UK and Ireland 3%, Asia 2%, Austria and Switzerland 2%, and others 1%.