Danske Bank Finland successfully sold a rare Eu1bn five year issue upon its return to the market after three years away today (Thursday), landing 2bp wider than an issue on Monday from the more established OP Mortgage Bank. Deutsche Pfandbriefbank is set to launch a Eu500m five year tomorrow.

Danske Bank plc (Finland) announced a mandate for its deal yesterday (Wednesday) morning and leads Credit Suisse, Danske, ING, SG and UniCredit launched the Eu1bn five year issue with guidance of the 9bp over mid-swaps area this morning. Guidance was revised to the 7bp area before the spread was set at 7bp, with the book in excess of Eu1.25bn.

“It went well,” said a syndicate official at one of the leads. “It is not the biggest book, but the deal is comfortably oversubscribed and we got a good reception.

“For an ECB purchase programme-eligible, Eu1bn deal, we are very satisfied with this result.”

Syndicate officials noted that the deal came 2bp wider than the most recent Finnish benchmark, a Eu1.25bn five year issue for OP Mortgage Bank that was priced at 5bp over mid-swaps on Monday on the back a book approaching Eu1.8bn.

“Pricing 2bp back doesn’t feel far offside,” said a syndicate official away from the leads. “I’d say there’s 1bp between the credits, so this feels about right.”

The lead syndicate official said he felt the pricing differential was appropriate.

“OP are up there with Nordea as national champions, whereas Danske Bank plc is a rare name,” he said. “It is fair that investors needed a little more to take this deal, but any more than 2bp would have been too much.”

The deal is the Danske Bank subsidiary’s first since a Eu1bn seven year deal in September 2012 that was launched under its previous name, Sampo, two months ahead of its rebranding as Danske Bank plc.

The lead syndicate official said that investors were already familiar with the issuer, but said Danske Bank and its leads had decided to adopt a two day execution strategy to help get accounts on board.

“Yes, the name has changed, but everything else is the same, including the programme,” he said. “But as it had been three years since their last deal, people needed time, if not to re-establish lines, then to take another look at the issuer.

“We needed time to kick-start the deal, and that paid off.”

The issuer’s parent last tapped the market on 1 September, with a Eu1bn five year backed by its I-pool. That was re-offered at 5bp over mid-swaps and was quoted at 9bp, mid, yesterday, according to one of the leads on the new issue.

Deutsche Pfandbriefbank (pbb) announced a mandate for a Eu500m no-grow five year public sector Pfandbrief this afternoon, with leads BNP Paribas, HSBC, LBBW, UniCredit and WGZ. A syndicate official at one of the leads said the deal will likely be launched tomorrow (Friday), subject to market conditions.

The new issue will be pbb’s second of the year, following another Eu500m five year, which was priced at 14bp in July.

The lead syndicate official noted that pbb has only one short-dated public sector deal outstanding, which has a 4% coupon. He said that the leads were therefore using pbb’s mortgage Pfandbriefe as comparables, and saw its March 2020s and July 2020s at around minus 15bp-14bp, mid, and January 2022s at around minus 15bp.

Syndicate officials said they expect market conditions to remain supportive for further issuance tomorrow and next week, adding that issuers that are eyeing deals should be encouraged after today’s new issues, including deals for Banca MPS and CCDQ (see separate articles) were all tightened from IPTs and comfortably oversubscribed.