Sparkasse KölnBonn will next week begin a roadshow for a Eu500m no-grow Pfandbrief and an official at the issuer said he is confident conditions will be conducive for issuance, which is expected the following week, in spite of the recent volatility in the wider markets.

The German issuer yesterday (Monday) announced the mandate for the roadshow, with the deal to follow subject to market conditions. Barclays, DekaBank, Helaba, Natixis and UniCredit are leads.

The mandate is the first for a euro benchmark to have been announced since Bund yields rose suddenly at the end of April and into the past week.

“Of course we have seen volatility in recent weeks, but Pfandbriefe have been stable,” said Ralph Rutemöller, responsible for funding and collateral management in the asset-liability management, fixed income department, at Sparkasse KölnBonn.

He said that ahead of the deal the issuer and its leads would assess the headlines coming out of Greece and the macroeconomic picture. He added that he was confident the asset class was resilient and that conditions would be favourable for the new issue.

“We don’t think there is a danger of volatility in the covered bond market and we are confident the market will be in good shape for this deal,” he said.

Covered bonds are the only instrument issued by Sparkasse KölnBonn in benchmark size, Rutemöller added, noting that the issuer had launched a Eu500m deal in each of the last two years after having previously been absent from the market from 2008. In October 2014 the issuer sold a Eu500m 10 year deal, following a Eu500m seven year printed in April 2013.

Rutemöller said that the issuer had opted to come to the market now because Eu2bn of grandfathered liabilities of the Sparkasse KölnBonn Financial Group will mature by the end of 2015.

Investors will be consulted on their opinions regarding the appropriate maturity for the deal, which has not yet been set, he added.