Helaba launched one of the tightest ever benchmark covered bonds today (Thursday), a Eu1bn four year at 15bp through mid-swaps, while Belfius priced a Eu500m five year at minus 4bp. OP Mortgage Bank has mandated a 10 year for launch in the near future.

Leads BNP Paribas, Commerzbank, DZ, Helaba and Natixis went out with guidance of 15bp-13bp through mid-swaps for the mortgage Pfandbrief this morning, dispensing with IPTs, and, when the books were over Eu1bn, set the level at 15bp through mid-swaps. The ultimate order book was some Eu1.25bn, according to a syndicate official at one of the leads.

The level is one of the tightest ever on a benchmark covered bond, being the tightest mortgage Pfandbrief and tightest four year benchmark. MünchenerHyp sold a Eu500m two year public sector-backed benchmark at 20bp through mid-swaps in December 2012 and a Eu500m five year public sector Pfandbrief at 14bp through in September 2012.

A syndicate official away from the leads nevertheless said that Helaba’s deal today was priced relatively generously, coming with a premium to the issuer’s curve. A lead syndicate official yesterday gave levels of minus 18.5bp, mid, for Helaba February 2019s.

The syndicate official away from the leads said that in today’s market issuers have the choice of pushing size or price – depending on how much they place with the Eurosystem under CBPP3 – and that Helaba appeared to have gone for size, with Belfius leaning towards price.

Belfius’s Eu500m deal was priced on the back of an order book described by a lead banker as well over Eu700m.

One syndicate official away from the leads said that the 4bp through level was “the best they could get”, while another said that he had quoted the same level to the issuer earlier this week.

Leads Belfius, Credit Suisse, Nomura, SG and UniCredit priced Belfius’s Eu500m five year deal at mid-swaps minus 4bp following IPTs of the minus 2bp area and guidance of the minus 3bp area. A lead syndicate official said that with Belfius January 2019s having been at minus 6bp, bid, and June 2020s at minus 2bp, today’s deal came with no new issue premium (NIP).

The Helaba lead syndicate official said that according to preliminary figures distribution to central banks and official institutions, which would capture any CBPP3 buying, was around 60%, and German demand – which Eurosystem buying channelled through the Bundesbank would also be included in – was around two-thirds. He said that the number of accounts involved, slightly over 40, was consistent with expectations in today’s market.

He described the book as strong and said it included some good names, and that price sensitivity was insignificant, with just two orders dropping at the final minus 15bp spread. He added that there was no order inflation and no fast money involved.

OP Mortgage Bank is next in the pipeline, with a 10 year benchmark having been announced early this afternoon for launch in the near future via Barclays, Credit Suisse, Pohjola and RBS. The deal will come after Nordea Bank Finland on 29 October issued the first CBPP3-eligble benchmark since the ECB’s programme was launched, a Eu1bn 10 year that was priced at 1bp over mid-swaps.

Sparkasse Hannover will launch a Eu250m 10 year fixed rate public sector Pfandbrief next week via DekaBank, Helaba, LBBW, NordLB and Sparkasse Hannover. In the announcement of the mandate it was highlighted that the unrated deal will be Level 2B compliant for LCRs.