Helaba is preparing a four year mortgage Pfandbrief for launch tomorrow (Tuesday), having gone out with IPTs, while ING Belgium is gearing up to make its covered bond debut, which will probably be in the five year maturity.

Landesbank Hessen-Thüringen (Helaba) announced its mandate early afternoon today (Monday) and leads BNP Paribas, Crédit Agricole, Credit Suisse, Deutsche Bank and Helaba are out with initial price thoughts of the mid-single-digits through mid-swaps, for tomorrow’s business. The deal is being marketed as a benchmark.

Helaba, Frankfurt

Helaba’s last benchmark covered bond was a Eu500m five year tap of a public sector Pfandbrief priced at 3bp over on 11 July. That was an increase of a June 2018 issue that was part of a Eu1bn dual tranche transaction sold on 17 June, which included a Eu500m 10 year re-offered at 13bp over.

A syndicate banker away from the leads said that the spread on Helaba’s new deal is very tight, but that it should work with the support of German-speaking investors.

“It’s very specific,” he said. “It’s not for everyone.”

The issuer has a 0.875% November 2017 mortgage Pfandbrief outstanding, which is quoted around 14bp through, mid, the same level as for a 2.875% April 2017 deal, according to a lead syndicate banker. Other relevant comparables include a 0.7% September 2017 Münchener Hypothekenbank deal quoted at 15bp through, mid, and a 1.125% February 2018 Berlin Hyp issue at 10bp through, according to the syndicate official.

ING Belgium is considering the five year maturity for its inaugural benchmark covered bond, according to an update from the issuer on Friday. It finished a roadshow on Thursday, and is weighing up tomorrow or Wednesday to launch a deal, a lead syndicate banker said earlier, before Helaba’s announcement.

Barclays, BayernLB, ING, Société Générale and UniCredit have the mandate.

Standard & Poor’s downgraded the Netherlands from AAA to AA+ on Friday, and the lead syndicate official said it was felt there was no need to rush to the market on Monday after this rating action, and that the issuer and the leads are also still collecting feedback while some investors are sorting out credit line availability.

ING will be the third covered bond issuer from Belgium, after Belfius and KBC. According to a syndicate banker away from the leads, Belfius and KBC have outstanding 2017 issuance that is at around 3bp-4bp over, and 2020 issues at around 17bp-18bp over.

ING’s deal should work well, he said, given that it is a new issuer and in five years it will offer a bit of spread versus French government bonds.

In five years OATs are trading at around 6bp through, he said, while in 10 years they are at around 23bp over.

“In five years there will be a bit more of a spread versus OATs,” he said.

A mandate for National Bank of Canada is the only other primary market related project in the public dead pipeline. The issuer went on a roadshow with BNP Paribas, Commerzbank, NBC Financial Markets, and RBS in early November before going into blackout. NBC releases its fourth quarter results on Wednesday.

A syndicate official noted that issuance is set to come ahead of the European Central Bank’s monthly monetary policy announcement on Thursday and US nonfarm payrolls on Friday.