HSH Nordbank attracted Eu850m of orders for a Eu500m seven year Pfandbrief today (Wednesday) that a banker at one of the leads said is the German issuer’s best deal for some time, supported by a market “awash” with cash.

HSH’s last benchmark Pfandbrief, a Eu500m five year issue on 17 February, attracted around Eu600m of orders, while two Eu500m issues in 2015 were not fully subscribed. Bankers at the time attributed the deals’ struggles partly to HSH being a difficult name, with its Pfandbriefe rated Aa3 by Moody’s.

HSH Nordbank leads BNP Paribas, Commerzbank, DZ Bank, HSH Nordbank and Nomura today launched the Eu500m no-grow seven year mortgage Pfandbrief with guidance of the 27bp over mid-swaps area. Guidance was then revised to the 25bp area on the back of orders in excess of Eu500m, excluding the Eurosystem. The deal was then re-offered at 23bp with books over Eu850m.

“This is the best deal for HSH for some time,” said a syndicate official at one of the leads. “It’s very pleasant.”

The lead syndicate official said the deal had benefitted from positive market sentiment and high liquidity.

“There is a lot of free-floating money out there, and quite simply, all deals are working,” he said.

The lead syndicate official noted that Deutsche Pfandbriefbank yesterday (Tuesday) attracted orders of Eu1.8bn for a Eu500m four year senior unsecured issue.

“They are another issuer that has sometimes struggled, but yesterday, thanks to this market awash with cash, they did very well,” he said.

Syndicate officials at and away from HSH’s leads said fair value for the new issue was in the low 20s, based on an 18bp, bid, level for its public sector February 2021s, which they said were the best comparable. They noted that HSH’s curve is inverted, with its longer dated mortgage backed bonds trading at tighter levels.

“Optically it was a fairly big premium at the start, but this is not your standard triple A Pfandbrief and it’s not an easy name,” said a syndicate official away from the leads. “In the end, they tightened the price well.”

Bankers said more covered bond issuance could follow tomorrow (Thursday) or on Friday after further euro supply, from Toronto-Dominion, was well-received today (see separate article), even in spite of an ECB meeting tomorrow afternoon.

“There are a few guys looking, in particular from continental Europe,” said one. “We could still see more supply this week.”