LBBW at short notice joined Deutsche Pfandbriefbank in the market today (Thursday) to make for a two deal morning that has been rare for covered bonds recently, with LBBW setting a pricing record for 2012 and pbb said to have achieved its most successful deal for some time.

Deutsche Pfandbriefbank (pbb) had announced a mandate for a seven year Eu500m no-grow mortgage Pfandbrief yesterday (Wednesday) afternoon, and will price a new issue at 60bp over mid-swaps, the tight end of guidance of 60bp-65bp over, on the back of around Eu1.3bn of orders. Crédit Agricole, Commerzbank, LBBW and UniCredit are lead managers.

Landesbank Baden-Württemberg has set a new record for the most tightly priced euro benchmark covered bond this year, with leads Crédit Agricole, HSBC, ING and LBBW due to price a Eu500m maximum six year at 7bp over mid-swaps, 2bp tighter than where Berlin-Hannoversche Hypothekenbank on Tuesday sold a Eu1bn five year Jumbo mortgage Pfandbrief.

Guidance had been set at 7bp-9bp, following initial price thoughts of the 10bp over area. Slightly more than Eu2bn of orders from nearly 100 accounts were placed for the issuer’s first benchmark in nearly a year.

Lead syndicate officials said that the deals were priced without any new issue premium, with pbb for example pricing its new seven year inside where its October 2019s are marked, and that this demonstrates the liquidity situation after the ECB’s longer term refinancing operations (LTROs) while good German supply is rare or very expensive.

“Generally speaking, Pfandbriefe are immune from what is going on in global markets,” said one. “Pfandbriefe have demonstrated resistance and stability throughout the crisis and remain supported by the lack of supply and the high amount of Pfandbrief redemptions.”

Pbb last came to the benchmark euro market in January, selling a Eu500m five year at 75bp over, with a syndicate banker away from the leads noting that today’s deal was one of the issuer’s most successful, despite LBBW “running over the top” of it and seven years a relatively long duration, and that this is a positive signal.

“It’s an indication of a hot market for low beta names,” he said. “Hopefully it will act as a signal for others to step into the market.”

Like Berlin Hyp’s mortgage Pfandbriefe, pbb’s are rated double-A, albeit also by Standard & Poor’s. The ratings are Aa1, AA+ and AA+.

LBBW’s foray into the market was interesting, added the syndicate official, because the bank is an example of an issuer that is less beholden to market conditions and can very much choose the timing of a deal, with its decision to step into the market today perhaps a sign that it questioned whether it would be able to achieve better pricing than it can now.

In addition, LBBW’s deal stood out as being the one investors were “scrambling” for despite competition from other low beta supply from the likes of the EFSF and French government guaranteed Unedic, he said, with this type of relative value analysis across asset classes demonstrating investors’ comfort in covered bonds and faith in Pfandbriefe.

EFSF is due to price a Eu3bn three year at 18bp over on the back of more than Eu4bn of demand, while Unedic was earlier out with initial price thoughts of 30bp-35bp over OATs.