Germany’s BayernLB issued the first 10 year benchmark German Pfandbrief of the year yesterday (Tuesday), a Eu500m no-grow deal, with an official at the issuer noting that it garnered good momentum despite a difficult maturity and a busy marketplace.

Demand for Bayerische Landesbank’s deal was characterised as strong by syndicate officials given the modest levels of demand German Pfandbriefe have recently been attracting relative to deals from peripheral issuers. BayernLB’s deal also came into a market where Spain’s Banco Popular Español and the Netherlands’ NIBC Bank were competing for attention.

Lead Barclays, BayernLB, Crédit Agricole, DZ Bank and UniCredit collected over Eu1.1bn of orders for BayernLB’s deal from more than 70 accounts. They priced the covered bond at 8bp over mid-swaps, having gone out with initial price thoughts of the 10bp over area before setting guidance at the 9bp over area.

Miriam Scuka, head of funding execution at BayernLB, said that she was pleased with how the deal went, noting that the maturity was not a straightforward proposition.

“This was a really successful transaction,” she told The Covered Bond Report. “I think the 10 year maturity is not an easy one because of the overall yield situation.”

A syndicate official away from the leads said yesterday that although the launch of BayernLB’s issue was unexpected yesterday, a deal from the German bank was long-awaited.

Scuka said that the bank had been waiting to finalise a programme update before announcing a mandate.

“We were told on Monday that we could enter the market, and with the market in such a good condition we decided to take advantage of it and go straight ahead to issue the first German Pfandbrief of 2014 in 10 year format,” she said. “We got very good momentum from the beginning, with strong demand and a good order book size when we opened.”

The German issuer’s last euro benchmark was also a Eu500m 10 year, which was priced at 11bp over in April 2013.

Scuka said that she believed the success of the last transaction and BayernLB’s credit quality pushed the deal along.

“We are well known, and, as such, can rely on a decent investor base,” she said.

The issuer does not have imminent plans to tap the market again this year, she added.