Natixis Pfandbriefbank is ready to sell its first Eu250m covered bond in the very near future after an investor roadshow last week and following three years of growth, according to the German issuer’s CEO, who added that the deal is likely to be longer dated, based on investor feedback.

Natixis Pfandbriefbank completed a series of investor meetings in Germany last week, ahead of an expected Eu250m mortgage Pfandbrief that will be its first public, sub-benchmark issue.

Hansjörg Patzschke, CEO of Natixis Pfandbriefbank, said the issuer is now hoping to launch the deal “in the very near future”, after waiting today while CFF – like Natixis Pfandbriefbank a member of the BPCE group – was in the market (see separate article).

“We of course have coordinated with our French colleagues, and so we won’t come today in order to avoid the two of us being in the market,” he told The CBR. “But as soon as possible we would like to enter the market, and we will decide this in the next few days with our mandated joint lead banks.”

DZ, Natixis and NordLB are leads.

Natixis Pfandbriefbank has issued privately placements since January 2013, when the bank started operations, and Patzschke said the German issuer was therefore “more or less known” to the investor base in Germany. He said the roadshow had been held to update investors about the bank’s progress and business model.

“In January 2013, we started with a very low balance sheet of just a couple of hundred million euros,” Patzschke added. “There was no other possibility than issuing private placements in the beginning, because we were so small, and this bank technically is a kind of start-up – after the starting phase in early 2013 we were not transferring any loans from anywhere else in Natixis to this bank.”

The German issuer has been increasing its issuance sizes as its balance sheet has grown, Patzschke said, having now issued two Eu100m deals, the first in 2014 and the second in 2015.

“The Eu250m is the next step,” he said. “The bank has been growing and we have a balance sheet now of a good Eu2bn, as of December 2015, allowing us to increase our issuance sizes.

“The other reason we want to issue a sub-benchmark is that with such a transaction, which is LCR-eligible for banks, we are of course enlarging our investor base within Europe.”

Patzschke added that feedback gathered on the roadshow suggested that investors would prefer a deal at the long end of the curve.

“The long end in our context means between seven and 10 years,” he said. “From the investor side, it is of course the yield situation that is leading them to want to invest in longer dated deals, with the swap curve presently all negative up to six years.

“That was our wish from the issuer’s point of view also, because this fits best into our balance sheet. In this case it’s an ideal situation where our planning and strategy is matching the investors’ demand in terms of maturity.”