Deutsche Pfandbriefbank sold a Eu500m six year issue today (Monday) that is the seventh German benchmark Pfandbrief in seven business days, but came at the wider end of pricing and lower end of oversubscription. More diverse supply is hoped for after a positive opening to the week.

Syndicate officials said that market conditions today were good, with one noting that European equities were up almost 2% alongside a higher oil price while the iTraxx senior index was 5bp tighter and the subordinated 11bp tighter, with the rally following through into cash bonds.

Leads Commerzbank, Deka, NordLB, UBS and UniCredit launched the Eu500m no-grow six year Deutsche Pfandbriefbank (pbb) issue with guidance of the 9bp over mid-swaps area and priced it at 8bp over, with a late book update putting orders at “well over” Eu600m.

A syndicate official away from the leads said that it was good to see the deal “cross the line” with pricing inside guidance, but he noted that the outcome was more modest than for some of last week’s five German benchmarks and a LBBW deal on 12 February that kicked off the Pfandbrief supply.

“We definitely see two camps on the Pfandbrief side given where most of last week’s deals were pricing,” he said. “Most of those came at around mid-swaps, plus or minus a little, while pbb is pricing a little bit up compared to those.”

With the exception of a Eu500m HSH Nordbank five year issue at 18bp over mid-swaps on Wednesday, the German issuance has come at between mid-swaps minus 3bp and plus 1bp.

“But it seems there was less demand for pbb,” he added, noting that the market could not be a reason for this. “Maybe there are less lines available.”

Among comparables, the leads cited a level of mid-swaps plus 2.2bp, mid, for pbb January 2022s, while a seven year pbb issue launched in January at 8bp over mid-swaps was seen by a syndicate official at one of its leads bid at around 12bp over. He said that today’s levels reflected the move in the market since January, noting that the no-grow Eu500m size of the new issue would have helped with the spread.

Hamburger Sparkasse is finishing a roadshow today and is expected with a benchmark mortgage Pfandbrief via Commerzbank, Deka, LBBW and WGZ in the coming days. A syndicate official at one of the leads said that Wednesday is most likely, but the issuer has the flexibility to accelerate or hold off depending on market conditions. The issuer has indicated on its roadshow a preference for a medium term maturity and the syndicate official said that a five year deal, for example, is more likely to come in line with those German Pfandbriefe that have priced around the mid-swaps flat level.

Deutsche Apotheker- und Ärztebank (apoBank) has also been marketing a potential new issue (via leads Commerzbank, DZ, NordLB and UniCredit), but syndicate officials are hopeful that the constructive market conditions could attract issuers from other countries besides Germany into the primary market. One cited Norwegian and other Nordic names as looking, with further potential for Belgian and French supply.

He also said that the success of recent issuance and a more stable rates environment could encourage candidates to look at the longer end of the curve – the last 10 year-plus issuance was a Eu500m 15 year deal from Commonwealth Bank of Australia on 27 January – even if issuers would still have to be careful.