ApoBank sold a first benchmark Pfandbrief in seven years on Wednesday and the issuer’s head of treasury said the comeback was in conjunction with planned growth at the German bank, which focuses on healthcare professionals, and that it hopes to return again in the first half of 2016.

The Eu500m long five year Pfandbrief, which attracted over Eu900m of orders, was the first benchmark deal from Deutsche Apotheker- und Ärztebank (apoBank) since 2008.

Alexander van Echelpoel, head of treasury at apoBank, said the issuer meanwhile focussed on smaller private placements and retail funding.

“Since our last benchmark issue, our balance sheet decreased steadily and we had a nice increase in client deposits, so there was no need for funding on the capital markets in bigger size,” he said. “This has changed now, because the balance sheet decline has stopped and the bank aims to grow its lending book again.

“Therefore we decided to start bigger ticket funding again and went on the road.”

In the week before its deal, apoBank held investor meetings in Germany and abroad in Austria, Switzerland, Luxembourg and the Nordics.

“The roadshow was successful,” said van Echelpoel. “We were able to highlight our unique business model and show potential investors that apoBank is back on track and making good results in its niche in the German health sector.

“In addition we highlighted the strength of our cover pool, which is to a very big degree residential and consists mainly of doctors’ houses and apartments.”

Van Echelpoel added that apoBank had also communicated to investors that there is hardly any structured or peripheral credit risk left on its balance sheet.

“As good doctors we took antiseptic measures to clean our balance sheet,” he said. “With a current NPL ratio of only 1.7%, we fare very well even on an international scale. Our current CET ratio nearly reaches 22%.”

On Wednesday, leads Commerzbank, DZ, LBBW and Natixis priced the Eu500m no-grow February 2021 mortgage Pfandbrief at minus 8bp through mid-swaps, with the final order book over Eu900m and comprising almost 40 accounts. The deal was launched with initial price thoughts of the mid to high single-digits through mid-swaps area, before the leads moved to guidance of the minus 7bp area.

“We found a good window, with no competing supply and yields just increased quite a bit from their recent lows,” said van Echelpoel. “In the end, Wednesday was a good day to get the ball rolling.

“The size of the order book represents a big success when compared with some deals of recent weeks and given the fact that people haven’t seen us for so many years.”

Van Echelpoel noted that the allocation to domestic accounts, at 69.5%, was lower than that of other recent Pfandbrief issues. Accounts from the Nordics were allocated 19.2%, Switzerland 9.8%, and others 1.5%. Banks took 47.7% of the deal, central banks and official institutions 28%, funds 24%, and others 0.3%.

Van Echelpoel added that apoBank expects its cover pool to grow significantly, in line with the expected balance sheet expansion.

“With this expected development, we are quite confident that we will be a regular issuer in the benchmark segment,” he said. “This won’t be our last deal. We plan to be back in the first half of next year.”