Deutsche Pfandbriefbank (pbb) placed a Eu500m seven year mortgage Pfandbrief yesterday (Monday) supported by a larger bid from foreign investors than in previous transactions, according to an official at the issuer.

Leads Commerzbank, DZ Bank, Goldman Sachs, LBBW and UniCredit priced the deal at 25bp over mid-swaps, after having gone out with initial price thoughts in the mid to high 20s, and guidance of 25bp-27bp over.

The order book reached Eu600m, with 72 accounts participating.

Götz Michl, head of funding at Deutsche Pfandbriefbank, noted that international investors took 38% of the deal, one of the highest shares of its recent transactions.

“We are pleased by the high amount of international investors,” said Michl, “We increased our investor relations activities recently, especially in Asia and in core European countries.”

German investors took 62%, Asia 16%, Austria and Switzerland 8%, Nordics 6%, the Benelux 5%, the UK 2%, and others 1%.

Bank took 54%, funds 14%, central banks and agencies 19%, and insurance companies 13%.

Michl said that the decision to come to market yesterday was prompted by a general lack of supply and “quiet” market conditions.

Some bankers away from the leads had highlighted the difficulties of placing Pfandbrief issues in the prevailing low yield environment. Michl acknowledged such difficulties in general, but said that this factor did not play a part in yesterday’s pricing decisions, and that priced at 25bp over mid-swaps the new 2020 issue offered a limited new issue premium if compared with a pbb June 2019 that was trading at 20bp over mid-swaps.

The new issue was pbb’s second benchmark since the beginning of the year. On 23 January pbb launched a Eu500m four year deal that was priced at 8bp over mid-swaps. Michl said that pbb’s latest issue was priced in line with the issuer’s curve, which is particularly steep at the long end.

Some market participants suggested that issuers could be looking at tapping the covered bond market now as they may fear that market conditions could deteriorate in the near future, and this could have prompted pbb to launch its second transaction in less than two months.

Michl said that the decision to tap the market yesterday was not driven by such considerations.

“Our goal is to have a constant presence in the market,” he said.