UniCredit Bank launched a Eu500m 10 year covered bond today (Wednesday), the second Pfandbrief of that maturity this week, after a deal for BayernLB yesterday, and Deutsche Hypo tapped a January 2018 year mortgage Pfandbrief for Eu250m.

Leads Commerzbank, Credit Agricole, DZ Bank, JP Morgan, and UniCredit set initial price thoughts in the mid teens for UniCredit’s deal, a mortgage Pfandbrief, before setting guidance at the 13bp over mid-swaps area on the back of Eu800m of indications of interest. The re-offer spread was then fixed at 12bp over, with more than a Eu1bn of orders.

Syndicate officials at the leads said that the deal had been a smooth and straightforward affair, with one saying that it had in effect been a “copycat” of a deal for Bayerische Landesbank yesterday in terms of size and allocation.

BayernLB priced a Eu500m 10 year no-grow Pfandbrief at 8bp over yesterday. (See separate article.)

Views differed on the size, and existence, of a new issue premium on UniCredit’s deal. One syndicate banker said that the main point of a 10 year maturity is to “get investors involved”. Another said that if you extend the curve from a Eu500m 10 year Pfandbrief issued by the bank in September 2012, currently trading at 1bp over, he would put the new issue premium at 3bp-4bp.

“There are a lot of fairly easy sales out there at the moment, with this liquidity game getting played,” he said. “Investors will not push for a new issue premium if they believe the pricing is fair. They are more interested in putting their money to work.”

A syndicate official away from the leads described the market as receptive, and said that the pricing of UniCredit Bank’s deal was fair, adding that there was “nothing too unexpected about the deal”.

Meanwhile, Deutsche Hypothekenbank tapped a Eu500m five year mortgage-backed Pfandbrief, which was issued on 15 January 2013, for Eu250m on the back of strong investor demand for German Pfandbrief, according to a syndicate official on the deal.

BayernLB, Commerzbank, Deka, Deutsche, Natixis, and NordLB were the lead managers for the increase, setting the re-offer spread at 3bp through mid-swaps. The original issue was priced at 1bp over.

A syndicate official away from the leads noted that the tap was being priced at the wide end of where it was initially marketed, namely at 5bp-3bp through.