Deutsche Hypo pulled off a tight Eu500m seven year Pfandbrief in a soft market today (Monday), and while no other deals have been announced for imminent launch a mandate for Aktia in a new incarnation has added to a healthy roadshow pipeline.

Leads BayernLB, Crédit Agricole, Commerzbank, DZ Bank and NordLB opened the order books on Deutsche Hypo’s deal this morning after announcing the mandate on Friday afternoon.

A roadshow mandate for Aktia Bank also hit the screens this morning, with the Finnish issuer laying the groundwork for its debut deal following the group’s move away from issuance via Aktia Real Estate Mortgage Bank. (See separate article for more.)

Also in roadshow mode are Credito Emiliano and ASB Bank. Credito Emiliano is working with Barclays, ING, Natixis, RBS and Société Générale, and will wrap up its roadshow in about two weeks’ time, according to a banker at one of the leads. The issuer previously told The Covered Bond Report that it is leaning toward covered bond rather than senior unsecured issuance.

ASB begins a roadshow this Wednesday, via Barclays and UBS, and also favours a covered bond, according to a banker working on the project. The roadshow finishes next Wednesday (12 June). Should a deal emerge soon thereafter it would most likely be before covered bond legislation is passed in New Zealand, as it is still making its way through the country’s parliament, with the syndicate banker saying that this should not pose a problem given that Kiwi banks have already issued structured covered bonds.

The market’s tone deteriorated over the course of last week and syndicate officials said sentiment is on the weak side today, but that this should not deter issuance beyond Deutsche Hypo’s transaction, with one saying that peripheral supply, at least in covered bonds, also remains possible. UniCredit has been mentioned as possibly being interested in tapping the market.

“I expect more business this week,” said the syndicate banker. “There are a lot of go/no-go calls.”

The decision to proceed with execution of Deutsche Hypothekenbank’s deal this morning was straightforward, said a syndicate banker on the transaction.

The leads will price a Eu500m no-grow deal at 5bp over mid-swaps, in line with guidance of the 5bp over area. Initial price thoughts were in the mid-single digits.

By the time of The CBR’s deadline there had been no official communication from the leads on the size of the order book except that the deal is fully subscribed.

Syndicate bankers away from the new issue noted that it appears to have met with a relatively muted response, with one assuming that banks will account for a fairly large share of allocations. Another pointed out that the spread was not tightened during execution, but said that it was tight from the outset.

The lead syndicate banker painted a similar picture.

“It’s not flying given the tone and it’s a Pfandbrief,” he said, “but it’s working and it’s good to get a deal done in this market.

“The starting point was quite aggressive so there is barely any new issue concession.”

Not long after Deutsche Hypo announced the mandate for its Pfandbrief its issuer rating was upgraded by Moody’s on Friday, from Baa2 to Baa1. An analyst said that the issuer’s covered bonds could already be rated higher than their Aa2 level based on a TPI of high and the issuer rating, and that it remains to be seen whether Moody’s considers prevailing overcollateralisation levels sufficiently committed and high enough to justify an upgrade of the covered bonds.