Investors were today (Tuesday) treated to not one, but two new euro benchmark covered bonds, with Terra sizing its first jumbo on the back of what some said was attractive pricing versus Norwegian peers, and Helaba making a strong sub-Libor showing with a rare mortgage Pfandbrief.

The deals are the first benchmark euro covered bond supply since 18 October, when Bankinter sold a Eu500m three year cédulas hipotecarias. The last new benchmark from a core country was a Eu500m seven year mortgage Pfandbrief from Deutsche Hypothekenbank on 25 September.

Norway’s Terra BoligKreditt met with some Eu2.5bn of orders for a new five year that was launched this morning, with leads BNP Paribas, Commerzbank, Natixis and UniCredit fixing the spread at 35bp over mid-swaps and the size at Eu1bn. The deal is Terra’s first to reach jumbo size, a move made possible by increased issuance capacity.

Guidance was initially set at the 40bp over area, which was then revised to the 37bp over area, and in another step to 35bp-37bp over, according to a lead syndicate official. The deal came after a roadshow last week.

Landesbank Hessen-Thüringen, meanwhile, has priced a Eu500m maximum five year mortgage Pfandbrief at 7bp through mid-swaps, the tight end of guidance of 5bp-7bp through, which followed earlier guidance of the 5bp over area, according to a syndicate banker at one of the leads – BNP Paribas, Deutsche Bank, Helaba, Natixis and UBS.

“It went very well,” he said. “The pricing is very fair, and is more or less flat to secondaries.”

Comparables included a 2.875% April 2017 Helaba issue that was trading at around 11bp through mid, although the syndicate official noted that the bond was very squeezed.

The deal is Helaba’s first mortgage Pfandbrief in a long time, he added, and in contrast to the issuer’s public sector issuance is only rated by one rating agency – by Fitch, which is expected to assign the mortgage issue a AAA rating – and therefore something of a test case.

This influenced the execution approach, according to the syndicate banker, with the leads deliberately refraining from communicating guidance or initial price thoughts when they announced the trade yesterday (Monday) afternoon.

“We just sent comparables and asked for feedback,” he said. “Investors came back and said -5bp through would be a fair level, and the size of the order book justified tightening the level in the end.”

Syndicate bankers away from the deals said the transactions were encouraging, and that the outcomes were good.

“The deals worked fabulously,” said one. “They show that liquidity is still there. It’s hard to know when deals will work and when they won’t, but these did.”

He singled out Helaba’s trade as somewhat surprising, saying he wouldn’t have expected it to come so much through Libor given poor performance by the latest German Pfandbriefe to have been priced at the tight end of the covered bond market.

“People didn’t seem too hot on sub-Libor,” he said, “but this deal went through sub-Libor well.”

Münchener Hypothekenbank priced a Eu500m five year at 14bp through mid-swaps at the beginning of September, with the deal now trading at around -6bp/-9bp, according to one syndicate banker.

He said that the pricing on Helaba’s deal was fair, with 5bp through in line with his expectations and a slightly tighter re-offer spread positive.

“The relative value versus KfW looks slightly better than when Munich Hypo came,” he added, putting the spread over the German agency issuer at around 10bp compared with a pick-up of around 8bp that was on the table when Münchener Hyp sold its deal.

Whereas Münchener Hyp’s deal underperformed, he said, he expects Helaba’s Pfandbriefe to stay around re-offer or tighten.

Terra, meanwhile, was seen offering an attractive level on its deal, at least to begin with, with a syndicate banker away from the leads struck by what he saw as a cheap departure point on the basis of the 40bp over area, given strong technicals such as a lack of supply, in particular from the Nordic region.

However, he attributed the initial guidance to the leads wanting to play it safe on pricing to achieve a targeted Eu1bn size, and said that at 35bp over the deal was coming roughly flat to the secondary market curve.

Others noted a large pick-up versus Terra’s Norwegian peers, in the region of 20bp-25bp over DNB Boligkreditt, and 15bp over SpareBank 1 Boligkreditt, with one syndicate banker saying that, as a first reaction, the spread over DNB made the deal look cheap.

A Eu500m January 2017 Terra issue was variously seen trading at around 35bp or 36bp over mid, with syndicate bankers saying its latest deal came roughly flat to the curve.