A Eu1bn May 2017 benchmark covered bond for Bank of Ireland from yesterday (Wednesday) shows “how much things have moved on” in the 12 months since the issuer last year reopened the market for Irish financial institutions after the sovereign’s bail-out, according to a lead banker. Meanwhile, Münchener Hyp today priced a Eu125m Pfandbrief tap at 9bp through mid-swaps.

Some Eu3.6bn of demand from 235 investors poured in for Bank of Ireland Mortgage Bank’s deal yesterday, which was priced at 120bp over mid-swaps via leads Credit Suisse, HSBC, Lloyds Bank, Natixis and UBS.

That followed guidance of the 125bp over area, and initial price thoughts of the 130bp over area.

The three-and-half year mortgage-backed asset covered security (ACS) was one of six FIG transactions that hit the euro market yesterday, the rest of which were for senior unsecured debt. A syndicate banker on Bank of Ireland’s issue said it was the stand-out trade in terms of post-pricing performance – it tightened by 12bp – and the size of the order book.

“Twelve months after issuing the region’s first public financial transaction post-bail-out, Bank of Ireland used the pre-funding to make a statement about how much things have moved on,” he added.

Bank of Ireland reopened the public market for non-sovereign guaranteed Irish financial institution debt on 13 November last year, with a Eu1bn three year ACS that was priced at 270bp over.

Yesterday’s covered bond attracted 60 more investors than the November trade, and around Eu1.2bn more of demand, noted the syndicate banker, in addition to coming 150bp tighter.

The order book is the largest for an Irish covered bond since the crisis, he added.

Real money accounts and banks buying for Liquidity Coverage Ratio (LCR) purposes were the main drivers of demand, coming in with sizeable orders, according to the syndicate banker. The top 10 orders were for Eu1bn in total.

Germany and Austria took 33%, the UK 22%, France 11%, the Nordics 10%, the Benelux 7%, Switzerland 6%, southern Europe 5%, and others 6%.

French participation was higher than expected, said the syndicate banker, comparing it with a 4% take-up of Bank of Ireland’s previous transaction despite that having featured a longer tenor (seven years).

Asset managers were allocated 65%, pension funds and insurance companies 17%, banks and private banks 13%, central banks and public entities 4%, and others 1%.

The CBR will be following up on the transaction with the issuer’s perspective tomorrow (Friday).

Münchener Hypothekenbank today (Thursday) added Eu125m to a five year public sector Pfandbrief at 9bp through mid-swaps via leads Credit Suisse, DZ Bank, Helaba, Nomura and NordLB. The increase takes the October 2018 issue size to Eu750m, after having been first launched as a Eu625m deal at 5bp through at the end of September. That was the tightest pricing for a German Pfandbrief this year, with the 9bp through re-offer spread for the tap surpassing this.