MünchenerHyp sold a Eu500m 10 year Pfandbrief today (Monday) with a book of over Eu700m against a backdrop of fluctuating yields, while DNB Boligkreditt attracted over Eu2.2bn of orders for a Eu1.5bn seven year issue. CIBC is pricing a rare Australian dollar issue, a five year FRN.

Caffil and ABN Amro last week sealed the return of longer-dated supply to the covered bond market, selling 10 and 15 year deals, respectively, with ABN Amro’s Eu2.25bn issue – the biggest single-tranche euro benchmark since January 2012 – particularly impressing bankers, as falling yields lead to shorter-dated Eurozone supply falling out of favour.

Münchener Hypothekenbank followed today, launching the first benchmark German Pfandbrief with a maturity of 10 years or longer since January, when BayernLB and WL Bank sold Eu500m issues.

MünchenerHyp leads DZ, HSBC, LBBW and UniCredit launched the 10 year mortgage Pfandbrief with guidance of the flat to mid-swaps area. The deal was then re-offered at 1bp through mid-swaps, on the back of orders “well above” Eu500m, before the size was set at Eu500m.

“With the swap rate where it is, and with the absolute price, it was clear this was not necessarily going to be the easiest deal to execute,” said a syndicate official at one of the leads. “But in the end it comfortably got over the line.”

The deal was ultimately priced with a yield of 0.508% and a coupon of 0.50%, although the lead syndicate official said it had been unclear whether the deal would have a yield of 0.375% or 0.50%, as the 10 year swap rate had been fluctuating through the day.

“The timing of the deal was not so much to do with which way rates are moving,” he added, “but it is just that MünchenerHyp has not yet been in the market in 2016, and looking at the market it is obvious that deals have been working well to very well, so we were confident they would have a good chance today.

“It was important for MünchenerHyp to show their name again.”

Syndicate officials at and away from the leads said the deal offered a new issue premium of around 1bp, seeing MünchenerHyp June 2024s at minus 7bp, mid, and March 2025s at minus 5bp.

“It seemed a fairly aggressive starting point,” said a syndicate official away from the leads. “But in the end, they were still able to leverage the price.”

DNB Boligkreditt leads Barclays, Commerzbank, NordLB and RBS launched the Norwegian seven year issue with guidance of the 19bp over mid-swaps area, before revising guidance to the 17bp area on the back of over Eu1.6bn of orders. The spread was then fixed at 16bp, with the book closing at over Eu2.2bn, before the size was fixed at Eu1.5bn.

“The book built very nicely, and in the end Eu1.5bn is at the upper end of the sizes we have seen in covered bonds this year,” said a syndicate official at one of the leads. “This ticks both of the boxes in terms of the issuer’s size and pricing aspirations, with some good price movement, so we’re very happy.”

Syndicate officials away from the leads agreed the new issue had gone well, with one noting that the deal had been priced 12bp inside a seven year issue for Lloyds issued last Monday.

“It’s a sizable book and if you think about the absolute level relative to other non-Eurozone paper last week, when you had Lloyds come at 28bp, then it’s a strong print,” he said. “It confirms that seven years are a good place to be.”

Some bankers said fair value for the new issue was 11bp, seeing DNB Boligkreditt’s March 2022s at 10bp, mid, and November 2022s at 11bp. Others said fair value was around 13bp, based on the bid side of DNB Boligkreditt’s curve.

The deal is DNB Boligkreditt’s second benchmark euro-denominated covered bond of the year, following a Eu1.5bn five year issue on 7 January.

Canadian Imperial Bank of Commerce leads ANZ, CIBC, HSBC and NAB today launched CIBC’s five year benchmark floating rate note with guidance of the 110bp over three month BBSW area. The books were approaching A$300m (Eu199m, C$294m) at the last update, with the deal set to be priced after the Australian open on Tuesday morning.

The deal had been expected after CIBC held investor calls on Wednesday.