Pbb set for US dollar debut, with Aa1 pick-up expected
Deutsche Pfandbriefbank (pbb) is set to launch a debut, US dollar Pfandbrief next week, having announced a roadshow ahead of a three year public sector issue this (Tuesday) afternoon, and bankers said the deal could offer a “juicy” pick-up over recent higher-rated Eurodollar issues.
German issuers have sold four benchmark US dollar covered bonds this year, with LBBW the first to tap the market in May, before MünchenerHyp sold a $600m three year on 12 July and BayernLB a $300m three year on 2 August. Helaba then followed last Tuesday (9 August) with a $600m four year.
Bankers said that the US dollar market has been an attractive option for German issuers in recent weeks, with activity in euro markets muted during the holiday period and with recent deals priced at levels equivalent to or tighter than would have been possible in euros, where yields would be negative out to eight years or more.
Leads BayernLB, Commerzbank, Goldman Sachs, JP Morgan and Nomura announced the mandate for pbb’s three year Reg S public sector Pfandbrief today, and said that the deal is expected to be launched the week commencing 22 August following a “brief” roadshow.
“We felt a roadshow is necessary given that this is a new name to the US dollar investor base,” said a banker at one of the leads. “We also felt it would be helpful as this is not a triple-A issue, so accounts might need a bit more time to study the credit before we open books.”
Deutsche Pfandbriefbank’s public sector Pfandbriefe are rated Aa1 by Moody’s, whereas all previous dollar Pfandbriefe this year have been rated triple-A.
“This might then offer a juicy pick-up over the triple-A names,” said a syndicate official, and others agreed, noting that pbb Pfandbriefe offer a pick-up over most other German issuance in the euro market. One suggested the deal could be priced around 5bp back of the recent higher rated three year issues.
“I would not be expecting a huge pick-up, we are still talking about a double-A bond from an issuer in a highly-rated jurisdiction with high credit quality,” he said. “But naturally the starting point will be a little wider.”
Deutsche Pfandbriefbank (pbb) is set to launch a debut, US dollar Pfandbrief next week, having announced a roadshow ahead for a three year public sector issue this (Tuesday) afternoon, and bankers said the deal could offer a “juicy” pick-up over recent higher-rated Eurodollar issues.
German issuers have sold four benchmark US dollar covered bonds this year, with LBBW the first to tap the market in May, before MünchenerHyp sold a $600m three year on 12 July and BayernLB a $300m three year on 2 August. Helaba then followed last Tuesday (9 August) with a $600m four year.
Bankers said that the US dollar market has been an attractive option for German issuers in recent weeks, with activity in euro markets muted during the holiday period and with recent deals priced at levels equivalent to or tighter than would have been possible in euros, where yields would be negative out to eight years or more.
Leads BayernLB, Commerzbank, Goldman Sachs, JP Morgan and Nomura announced the mandate for pbb’s three year Reg S public sector Pfandbrief today, and said that the deal is expected to be launched the week commencing 22 August following a “brief” roadshow.
“We felt a roadshow is necessary given that this is a new name to the US dollar investor base,” said a banker at one of the leads. “We also felt it would be helpful as this is not a triple-A issue, so accounts might need a bit more time to study the credit before we open books.”
Deutsche Pfandbriefbank’s public sector Pfandbriefe are rated Aa1 by Moody’s, whereas all previous dollar Pfandbriefe this year have been rated triple-A.
“This might then offer a juicy pick-up over the triple-A names,” said a syndicate official, and others agreed, noting that pbb Pfandbriefe offer a pick-up over most other German issuance in the euro market. One suggested the deal could be priced around 5bp back of the recent higher rated three year issues.
“I would not be expecting a huge pick-up, we are still talking about a double-A bond from an issuer in a highly-rated jurisdiction with high credit quality,” he said. “But naturally the starting point will be a little wider.”
