BayernLB is preparing to sell its first sizable sterling-denominated covered bond in almost four years, having announced a mandate this (Wednesday) morning for either a floating or fixed rate public sector Pfandbrief issue to add to the brisk sterling supply in each format since New Year.

The deal will be either be a three year floating rate note (FRN) or a short five year fixed rate issue, via leads Barclays, BayernLB and Credit Suisse.

A banker at one of the leads said the issuer is in discussions with investors to establish which of the two formats would be preferred and said the deal could be launched in the coming days, subject to these discussions and to market conditions.

BayernLB has no public sterling Pfandbriefe outstanding, and the new issue will be its first sizeable sterling covered bond since February 2013, when it sold a £200m (Eu230m) deal that matured in February 2015. The German bank’s only other public sterling covered bond issuance was pre-crisis.

Three sterling FRNs have already hit the market so far this year, including a £250m three year for German peer Deutsche Pfandbriefbank (pbb) priced at 55bp over three month Libor last Thursday. Royal Bank of Canada and Commonwealth Bank of Australia have meanwhile provided two short five year fixed rate deals, £500m at 63bp over Gilts last Wednesday and £350m at 67bp over on Thursday, respectively.