UniCredit is expected to sell its first Pfandbrief benchmark in over a year tomorrow, having mandated for a euro-denominated nine year issue, while Deutsche Pfandbriefbank (pbb) is set to issue a US dollar-denominated three year, as conducive conditions raise supply hopes.

UniCredit this afternoon announced that it has mandated BayernLB, DZ Bank, LBBW, NordLB and UniCredit for the euro benchmark mortgage Pfandbrief. A syndicate banker at one of the leads said the deal will be launched tomorrow, subject to market conditions.

The German bank’s last benchmark Pfandbrief was a Eu1bn six year in February 2016. The deal is set to be the first new euro benchmark fromf Germany since 1 March, when DG Hypothekenbank sold a Eu500m long nine year.

UniCredit July 2023s were seen at minus 15bp, mid, April 2024s at minus 14bp, and February 2025s at minus 13.5bp. The leads also cited as comparables 2026 paper from WL Bank, DG Hypothekenbank and MünchenerHyp, all at minus 15bp-14.5bp, and Commerzbank, at minus 12.5bp.

Euro benchmark covered bond supply has underwhelmed so far this month, with just Eu3.75bn issued to date, Eu10bn below April 2016 supply.

However, syndicate bankers are optimistic that issuance will pick up in the last week of the month. They noted that market conditions are highly supportive, following the first round of the French presidential election yesterday (Sunday), with Emmanuel Macron expected to triumph over Marine Le Pen in the second round.

In light of the conducive backdrop, a syndicate banker said he expects at least three euro benchmark issues this week.

“I feel very positive about this window,” he said. “The market backdrop is good, the credit picture is good, and the calendar is clear.

“It’s been a very slow month but I expect a few deals – maybe even as many as five – to come forward this week.”

Another syndicate banker agreed, but was less bullish about the volume of potential supply.

“This week is a good opportunity, for sure,” he said. “But I’m not convinced there are that many banks that are keen to come to the market at present, and many will be in blackout.

“Normally you might think this would be a good opportunity for French issuers to get their deals done, but they were very active at the start of the year.”

Deutsche Pfandbriefbank (pbb) announced this morning that it has mandated BayernLB, Citi, Deutsche, DZ and Goldman Sachs for the Reg S mortgage-backed issue. A syndicate banker at one of the leads said the issue is expected to be launched tomorrow.

Pbb’s last US dollar benchmark was a $500m three year in August 2016, which it tapped by $100m in January.

The leads of the new issue saw pbb August 2019s at 48bp, mid, pre-announcement. They also cited as comparables BayernLB August 2019s at 33bp, Helaba August 2020s at 40bp, and LBBW May 2019s at 29bp. Pbb’s euro-denominated 2019-2020 paper was seen trading between minus 14bp and minus 11bp.

The deal will be the second German US dollar-denominated benchmark Pfandbrief this year, following a Eu750m three year for LBBW in January. The last wave of dollar supply came from the Nordics, with DNB Boligkreditt, Stadshypotek and SR-Boligkreditt each selling deals between late March and early April.