UniCredit Bank AG sold the shortest-dated benchmark German Pfandbrief in three months today (Tuesday), taking advantage of a back-up in rates to attract around Eu900m of orders for a swift Eu500m four year issue, and bankers said the result shows deals can still be done before year-end.

UniCredit’s deal was announced yesterday (Monday) afternoon, after a Eu1.25bn three year for CIBC earlier in the day that was the first three year euro benchmark since 5 November. Syndicate officials said that part of the curve is open once again after a back-up in rates that followed the announcement by the ECB of smaller than expected additional easing measures on Thursday.

UniCredit leads Crédit Agricole, Danske Bank, LBBW, Lloyds Bank and UniCredit launched the Eu500m four year mortgage Pfandbrief with guidance of the 3bp through mid-swaps area at 9.00 CET. The deal was then re-offered at 5bp through on the back of orders above Eu800m, before the book closed at around Eu900m at 10.20.

Syndicate officials at and away from the leads described the speed of the execution as a highlight.

“It went very well, and quicker than we expected,” said a syndicate official at one of the leads. “The deal got a very good reception, and if we had wanted to we would even have had the time to do another deal this morning afterwards.”

Syndicate officials said the deal was supported by the back-up in rates as previously a four year German Pfandbrief would have been priced with a negative yield, noting that the four year swap rate was around 1.35bp this morning. The new issue was priced with a yield of 0.089%.

A syndicate official away from the leads said the result shows the short end of the curve is open, after CIBC’s deal was also well-received yesterday.

“It is sensible for issuers to do this sort of deal now,” he added. “There is still some uncertainty around rates that the market is assessing after the Draghi disappointment, so these short-dated deals, which previously weren’t an option, are a good opportunity right now.”

The lead syndicate official agreed that the back-up in rates made the deal possible.

“Another factor worth considering is that this is a sweet spot for bank treasuries to invest below five years,” he said. “In that sense, the maturity was an important factor in why this deal went so well.”

The lead syndicate official said the book comprised sizeable orders from non-central bank investors, adding that Eurosystem participation was in line with recent deals.

Syndicate officials at and away from the leads calculated fair value for the new issue as being in the low to mid-teens through mid-swaps, seeing UniCredit’s April 2020s quoted at minus 12bp, mid, and German four year paper at around minus 14bp.

The deal is the shortest-dated German Pfandbrief since 2 September, when DG Hyp sold a Eu500m three year, and the first four year German Pfandbrief since July, when Helaba sold a Eu1bn issue.

The new issue is UniCredit AG’s fourth benchmark covered bond of the year, following Eu500m issues in March, July and September in the six, eight and five year maturities, respectively.

Syndicate officials said that further issuance could not be ruled out this week, citing the speed of UniCredit’s bookbuilding process as proof that the window remains open.

“I don’t see why this should be the last deal of the year,” said one. “The market is still good enough to get more deals done.”