“Extremely” attractive funding available via Pfandbriefe were a cornerstone of ING-DiBa’s decision to return to the market this week after four years away, according to the German bank’s head of funding, who said its use of a pre-US election window was vindicated by the surprise Trump win.

ING-DiBa announced the mandate for a Eu500m no-grow 10 year mortgage Pfandbrief on Monday, aiming to price the deal on Tuesday morning, ahead of any volatility arising from the outcome of the US presidential election, which results of which were due overnight.

“We had been looking at the market and saw a clear window ahead,” Frank Parensen, head of investment portfolio management and funding at ING-DiBa, told The CBR. “The market was very stable on Monday, and following the news from the US over the weekend, issuance conditions looked good.

“In the end, I’m very happy we did the deal on Tuesday, even though I didn’t see the election result coming. We know now that this window was probably the last window for at least a couple of days.”

Upon a stable open on Tuesday morning, leads Crédit Agricole, Commerzbank, Danske, ING and LBBW launched the deal with guidance of the mid-swaps minus 12bp area. Guidance was then revised to the minus 14bp area with books above Eu750m, excluding joint lead manager interest, before the spread was then set at minus 15bp, with the characterisation of the books unchanged. The book closed at Eu800m after reconciliation, including Eu70m lead manager interest.

“We are very pleased with the result,” said Parensen. “We were able to achieve a very attractive funding level on the back of a strong order book.

“Of course, these are no longer the times when order books are two or three times subscribed – this product is currently very expensive and the number of investors is lower. But the development of the book was very good, and justified the tightening of the spread.”

Some 40 accounts were in the final order book, with central banks and official institutions buying 38% of the deal, asset managers 23%, pension funds and insurance companies 21%, and banks 18%. Accounts in Germany and Austria took 79%, Asia 6%, the UK and Ireland 5%, the Benelux 4%, Iberia 3%, the Nordics 2%, and others 1%.

The new issue is the German ING subsidiary’s first benchmark Pfandbrief since March 2012, when it sold a Eu500m March 2019 issue, which is its only benchmark covered bond still outstanding. Its only other benchmark, a Eu500m debut sold in 2011, matured this June.

“The decision to fund via Pfandbriefe is always taken based on the growth of our lending book,” Parensen said. “But the extremely attractive funding levels we currently have in the market together with the development of our balance sheet development were definitely a cornerstone in the decision.”

Parensen added that investors will probably not have to wait so long for the issuer’s next benchmark.

“We are constantly reassessing our funding opportunities, considering what the market looks like and how the balance sheet is developing here at DiBa,” he said. “We will continue to do so in the future.”