Berlin Hyp attracted around Eu1.25bn of orders to a Eu500m eight year Pfandbrief today (Wednesday) that was priced around flat to fair value, and bankers said German lender’s deal was especially successful given competing supply from higher spread issuers.

The covered bond market sparked into life this morning, with three euro benchmarks – as BNP Paribas and NordLB Luxembourg were also out with Eu500m deals – making today the busiest day in euros since 16 January after a modest start to February.

Berlin Hyp leads Barclays, BayernLB, Commerzbank, HSBC and UniCredit launched the Eu500m no-grow eight year mortgage Pfandbrief this morning with guidance of the mid-swaps minus 7bp area – having announced the deal yesterday afternoon.

Guidance was revised to minus 9bp plus or minus 1bp will price within range on the back of books “well above” Eu1bn, before the spread was set at minus 10bp. The final book stood at around Eu1.25bn.

“Investors have varied options this morning, including a short-dated, high spread deal from Luxembourg and a fairly generous, high quality deal from France,” said a syndicate banker away from today’s deals. “In that context some deals might have got lost in the crowd, so Berlin Hyp did well to stand out today.

“In the end, they got a very solid book at a minimal spread.”

The deal was deemed to have been priced with little to no new issue premium, with bankers citing Berlin Hyp’s May 2024s – it’s longest dated outstanding – at around minus 10bp, bid. They noted that the curves of all German issuers are flat in the long end, implying that fair value for the new 2025 issue was around the same level.

After today’s sudden pick-up in the pace of supply, bankers expect further issuance later in the week, noting that a number of issuers are eyeing the market.