WL Bank yesterday (Thursday) tapped by Eu250m a Eu500m 2027 Pfandbrief, tightening the trade flat to the outstanding bond on the back of a Eu370m book. The deal capped a modest week of issuance, with no further supply emerging today, and next week is expected to be similarly sedate.

Westfälische Landschaft Bodenkreditbank (WL Bank) leads Deutsche Bank, DZ Bank, Erste and HSBC reopened the Eu500m April 2027 mortgage Pfandbrief yesterday with guidance of the 11bp through mid-swaps area, for a Eu250m no-grow tap. After almost an hour and a half the spread was fixed at minus 12bp on the back of Eu340m of orders, including Eu25m joint lead manager interest. The book closed around Eu370m.

The original Eu500m deal was priced at 8bp in March 2015.

“It was pretty routine, and it is notable that we were able to nail the deal pretty much exactly on the mid curve,” said a syndicate banker at one of the leads.

The tap was deemed to have offered no premium versus the outstanding bond, with the April 2027s trading at minus 12bp, mid, pre-announcement. Syndicate bankers at the leads also cited as comparables WL Bank January 2026s, seen at minus 17bp, and August 2026s at minus 15bp, as well as DG Hyp September 2026s at minus 15bp and MünchenerHyp April 2026s at minus 16bp.

Bankers noted the deal, initially a 12 year, now has slightly less than 10 years to maturity, meaning that come accounts that may due to maturity limits have been unable to buy the deal at launch were now able to participate.

The deal came after fellow German issuer Deutsche Bank on Tuesday tapped by Eu250m a Eu500m June 2026 Pfandbrief. Bankers noted Deutsche had attracted slightly more demand, having built books of over Eu400m, but its deal had been more generous, offering a 2bp premium.

Including the two taps, just Eu1.75bn of euro benchmark supply has been launched this week – the first week of April. The only other benchmark issuance came on Monday, when Yorkshire Building Society sold a Eu500m six year covered bond and Commonwealth Bank of Australia a Eu750m seven year.

“It has been an underwhelming start to April,” said a syndicate banker. “February and March have both been disappointing in terms of issuance volumes and we expected more of the same, but we hoped for more than this.”

Bankers said the modest volumes of euro supply could partly by explained by some issuers choosing to focus on higher beta markets while conditions remained so strongly supportive. This week, BBVA and OP Corporate Bank both sold senior unsecured benchmarks on Monday and Tuesday, respectively, while Erste Group Bank issued a Eu500m AT1 on Wednesday.

They also noted that the only pending new covered bond issues that have been publicly announced are in other currencies. Kookmin Bank on Wednesday began a roadshow ahead of a potential US dollar-denominated issue, whereas Deutsche Hypothekenbank last month held meetings with sterling investors, raising expectations that it could launch a debut covered bond in the UK currency. A banker close to the roadshow said a deal could yet emerge after the issuer exits its blackout period on Tuesday.

No new issuance emerged today, even though wider market conditions remained stable, with European equities and yields down only slightly this morning as investors reacted to US missile strikes in Syria overnight.

Bankers suggested, however, that any prospective issuers may have decided to hold off on entering the market until next week given the announcement of US non-farm payrolls this afternoon.

Next week will effectively be a four day week as jurisdictions across Europe mark Good Friday with a public holiday, and bankers expect the current sedate market tone to prevail.

“I don’t get the sense there will be any great rush,” said a syndicate banker. “What issuance does arrive will be opportunistic.”