Münchener Hypothekenbank launched its first benchmark sterling covered bond today (Wednesday), a £200m (Eu232.2m) three year mortgage Pfandbrief FRN, and an official at the bank said it wants to become a regular issuer in the currency given sterling funding needs.

Leads Barclays, Goldman Sachs and Nomura have set pricing at 23bp over three month Libor, in line with guidance.

The deal is the issuer’s first benchmark covered bond in sterling and Claudia Bärdges-Koch, deputy head of treasury at Münchener Hypothekenbank, said that it hopes it won’t be the last, with MüHyp aiming to be a regular issuer in the currency.

“We do commercial business in the UK so it fits perfectly to have sterling funding,” she said. “We laid the groundwork for this transaction with investor meetings over the past few months.”

The issuer will not swap the proceeds of the deal as it has sterling assets in its cover pool.

At 23bp over three month Libor the issuer is paying a premium compared with where it would fund in euros, according to Bärdges-Koch. She put the equivalent six month Euribor spread at 7.5bp through, and said that in euros the issuer would be looking at a spread of around 15bp through.

“So we are definitely showing an add-on,” she said.

The deal came after CM-CIC Home Loan SFH on Monday priced a £250m three year floating rate obligations de financement de l’habitat issue at 30bp over three month Libor. (See here for previous coverage.)