Landesbank Hessen-Thüringen today (Thursday) increased to jumbo size a five year public sector Pfandbrief that it first launched last month as part of a rare dual tranche deal, pricing a Eu500m tap of the bond 2bp tighter than where the initial issue was re-offered.

Helaba, Frankfurt

The dual-tranche transaction was launched on 17 June and comprised 10 and five year tranches, with demand biased toward the shorter dated Pfandbrief. The deal was lead managed by a nine-strong bookrunner group, and the same leads – Citi, Commerzbank, Danske, DZ, Helaba, HSBC, RBS, Société Générale and UniCredit – today gathered more than Eu800m of orders for the increase.

A syndicate official at one of the leads said that the strong secondary market performance of the five year tranche was the impetus to reopen the Pfandbrief, which was still marked at a tight level – around minus 6bp bid and minus 8bp mid.

The leads priced the Eu500m increase at 3bp through mid-swaps, which included a new issue premium of 5bp, he said, and was 2bp tighter than where it was first re-offered, at 1bp through.

“Bookbuilding went very quickly and smoothly,” he said. “There were more than 50 accounts across the board, with German but also international distribution, and central banks, given that the bond is now proper jumbo size.”