Deutsche Pfandbriefbank (pbb) rounded off a busy week in the covered bond market with a Eu500m five year Pfandbrief today (Friday), while bankers said next week will be one of the last good windows for more supply this year, with a CPT debut from Aegon expected early next week.

Deutsche Pfandbriefbank’s new issue took euro benchmark supply to Eu7bn for this week, comprising seven deals, and came after deals from a range of jurisdictions had been comfortably oversubscribed, with new issue premiums seen as remaining at recent lows or being further reduced.

Leads BNP Paribas, HSBC, LBBW, UniCredit and WGZ priced the Eu500m no-grow five year public sector Pfandbrief at 4bp through mid-swaps, having announced the deal with guidance of the 4bp through area. The final size of the order book was not disclosed by the leads.

“Overall, we are quite happy with this transaction,” said a syndicate official at one of the leads.

Syndicate officials at the leads said it was difficult to calculate fair value for the new issue, because the issuer has only one short-dated public sector deal outstanding, which has a 4% coupon. They said they were therefore using pbb’s mortgage Pfandbriefe as comparables, seeing its March 2020s and July 2020s at around minus 15bp-14bp, mid, and January 2022s at around minus 15bp, pre-announcement.

Syndicate officials away from the leads put the new issue premium at 6bp-8bp, based on the issuer’s secondary curve.

“Pbb has one of the more interesting credit profiles of German issuers, but this is still a Eu500m no-grow five year Pfandbrief and fairly routine” added one syndicate official away from the leads. “I’m sure they’ll be happy with taking Eu500m out of the market even if they haven’t moved in the spread.”

The syndicate official noted that all of this week’s deals had been in the five year part of the curve except for a Eu1bn 10 year from Banca MPS yesterday (Thursday).

“The depth remains in five years,” he said. “However, some accounts are now starting to say there’s been too much supply in that part of the curve, so I wouldn’t be surprised to see a push back to longer maturities soon.”

The new issue is pbb’s second benchmark covered bond of the year, following another Eu500m five year, which was priced at 14bp through mid-swaps in July.

Aegon Bank and leads ABN Amro, Rabobank, RBS, SG and UniCredit will today complete a series of investor meetings ahead of an inaugural issue off its new conditional pass-through programme. Syndicate officials at the leads said the deal is likely to arrive early next week, subject to market conditions.

Bankers said other issuers from a range of jurisdictions were also mulling potential deals, and added that they expect the market to remain receptive for new issuance after this week’s deals had attracted good demand and performed after pricing.

“The covered bond market has had something of a renaissance this week,” said one. “Economically they’ve gone well and the depth of order books has improved, and I think we should see more strong deals.

“We’ve had a good, active Friday, with deals in other asset classes, too, and that says all you need to know about the health of the market.”

Another syndicate official noted that windows for issuance are growing limited as the end of the month approaches.

“What’s encouraging about this week’s deals is that even as supply has continued new issue premiums have either remained at recent lows or further reduced,” he said, “whereas the last wave of supply in September and October weighed on new issue premiums.

“That should be supportive going into next week, which may be one of the last opportunities for issuance and looks a good window for any issuers that still have funding to do.”

Syndicate officials noted that an ECB meeting on 3 December, at which an announcement on an expansion or extension of quantitative easing is expected, and non-farm payrolls on 4 December could narrow windows for issuance, before liquidity could dry up in the middle of December and ahead of the conclusion of an FOMC meeting on 16 December.