Commerzbank sold its first benchmark Pfandbrief of the year today (Thursday), a Eu500m 10 year issue that impressed, coming 2bp inside a similar trade from Deutsche yesterday, while bankers noted any new Pfandbrief issuance will be boosted by high redemptions this month.

Deutsche Bank’s Eu500m 10 year Pfandbrief was priced at 1bp through mid-swaps after having been launched with guidance of the 3bp area.

After Commerzbank announced a mandate for a Eu500m no-grow 10 year mortgage Pfandbrief yesterday (Wednesday) afternoon, leads BNP Paribas, Commerzbank, HSBC, NordLB and Santander launched the deal this morning with guidance of the 1bp over mid-swaps area. The spread was eventually fixed at minus 3bp with the book approaching Eu1.2bn.

“It’s a good outcome all round, with reasonable demand for a Eu500m Pfandbrief,” said a banker away from the leads. “It looks like Commerzbank were specifically targeting a print through Deutsche, and they managed it comfortably.”

“I assume they are going to give each of their syndicates a medal.”

Another banker said the deal had benefitted from following Deutsche’s.

“It is a well-done copycat trade,” he said. “Deutsche started more conservatively, and that looked absolutely sensible at the time.”

Syndicate officials said that Commerzbank had been able to price inside of Deutsche partially because of its more aggressive starting point, and because the former issuer had been less active than the Deutsche group this year – with the new issue Commerzbank’s first benchmark Pfandbrief of 2016. Deutsche has launched two benchmark Pfandbriefe this year, having also sold a Eu750m eight year in March, while its Spanish arm launched a Eu500m seven year cédulas in January, after a Eu1bn five year debut in November.

Some syndicate officials also noted that Deutsche’s Pfandbrief curve is slightly wider than Commerzbank’s. Some attributed this to negative headlines that have surrounded Deutsche this year, while others noted that its deal in March had been priced slightly wider than those of comparable issuers as it was a quasi-debut, being the German bank’s first benchmark since 2012.

Bankers added that high redemptions this month are also supportive of new Pfandbrief issuance, noting that over half of maturing euro benchmark covered bond redemptions this month are German issues.

“However, I wouldn’t expect many issuers to be in a rush to capitalise on this,” said one. “The Germans have been very active of late.”

Syndicate officials said Commerzbank’s new issue offered a new issue premium of around 2bp versus recent 10 year Pfandbrief supply, seeing 2026s from Münchener Hypothekenbank, WL Bank and Deutsche Hypothekenbank quoted at minus 8bp-5bp, bid.