Cajas Rurales Unidas launched a Eu500m three year cédulas today (Tuesday) that is its inaugural deal after a merger that led to its creation in November, while Deutsche Pfandbriefbank has announced a sterling FRN that is likely to be launched later this week.

For the Cajas Rurales Unidas (CRU) deal, leads Crédit Agricole, Nomura, Santander and Société Générale set initial price thoughts and guidance in the 300bp over mid-swaps area, then tightened this to a re-offer spread of 290bp over.

The order book surpassed Eu900m pre-reconciliation, according to a lead syndicate banker, who said that the size of the deal – which had not been set by The CBR’s deadline – was being discussed with a view to finding an amount that would allow the deal to perform in the secondary market.

A syndicate banker away from the leads called the issuer another “obscure credit tapping the market at very wide levels”. But he said that the wide pricing should be considered in the context of the programme’s ratings, which are just above investment grade.

CRU is a new entity created after a merger between Spanish rural saving banks Cajamar and Caja Rural in November. CRU’s cédulas are rated Baa2 on negative outlook by Moody’s and BBB by Fitch.

A lead syndicate banker said that Cajamar’s predecessor entities have some outstanding covered bonds, but as they are mostly short dated they were not used as comparables for the transaction. The leads looked at the cédulas market and outstanding 2017 issues. The deal offered a decent pick-up over recent Spanish deals, he said, but this was justified by the lower rating of CRU cédulas.

An analyst said that at guidance of 300bp over mid-swaps the pricing seemed fair, considering that three year Bankia cédulas were trading at 275bp over mid-swaps, and that three year Santander cédulas were trading at 165bp over mid-swaps

A syndicate banker away from the leads said that pricing a deal in the 300bp over area did not leave the issuer with much margin, and added that the deal might have driven mainly by the desire to tap the public market rather than by cost-efficiency considerations.

The deal was the first new issue from a Spanish issuer since Cypriot crisis in mid-March, and followed a Eu500m tap launched by Bankinter on 29 April that was priced at 172bp over mid-swaps.

A syndicate banker away from the deal said that market conditions were supportive for a Spanish covered bond issue. He mentioned that the market was in general in good shape and that Spanish and Italian government bonds had tightened in the previous couple of days. Portugal was also in the market with 10 year sovereign bond this morning.

A lead syndicate banker said that the deal was announced yesterday (Monday) to give investors time to familiarise themselves with the offering and the new issuer. The deal was then launched today to make the most out of a strong market for peripherals and to a tap small issuance window open between a UK bank holiday on Monday and continental European ones on Wednesday and Thursday.

The syndicate bankers said the deal was well received. One said that this was in part the result of the high amount of liquidity in the market and the deal’s attractive pricing for investors.

Deutsche Pfandbriefbank announced a FRN sterling deal on Friday afternoon. BNP Paribas, Credit Suisse and RBS have the mandate.

A lead syndicate banker said that no further details have been decided, and that he expects the deal to be launched later this week.

A syndicate banker away from the leads said that it sounded strange for a sterling deal to be announced on a Friday afternoon with the UK market being closed on Monday because of a bank holiday.

The lead syndicate banker said that the deal does not specifically target the UK market, but global investors with sterling needs.

“A lot of international investors will need a bit more time to consider the deal,” he said. “Announcing the deal ahead of a bank holiday in the UK allowed us to plant our flag in the sand and to circulate the information globally.”

Deutsche Pfandbriefbank (pbb) sold a £250m seven year fixed rated covered bond in November 2012. Nearly half of that issue was placed in Asia, according to one of the leads.