A Eu500m 10 year Pfandbrief for WL Bank on Tuesday met the issuer’s expectations, according to its head of liquidity management, with the deal being priced 1bp inside guidance even though a tighter print was deemed achievable, and a relatively tight starting point used to give clarity to investors.

Westfälische Landschaft Bodenkreditbank (WL Bank) announced a mandate for its deal on Monday afternoon, booking its slot to be the first issuer in the euro covered bond market this week, following MünchenerHyp and Commerzbank, which printed long dated benchmarks last week. Torsten Probst, head of liquidity management at WL Bank, said the issuer decided to come to the market as summer holidays were almost over in Germany.

Leads DZ Bank, Erste, Helaba, Natixis and NordLB launched the deal on Tuesday morning with guidance of the mid-swaps minus 11bp area. Guidance was later revised to the minus 12bp area plus or minus 1bp will price within range, on the back of over Eu575m of orders, including Eu50m of joint lead manager interest.

The spread was then set at minus 12bp with books approaching Eu600m, including Eu60m JLM interest. The book closed at Eu630m with over 35 accounts.

“The deal went well and we could reduce the spread,” Probst told The CBR. “There were few limited orders, so a minus 13bp print would have been possible as well.

“Overall it went completely in line with our expectations.”

Last week’s deals for MünchenerHyp and Commerzbank attracted over Eu1bn and around Eu1bn of demand, respectively, and some bankers suggested that the more modest response to WL Bank’s deal was a result of the deal being announced with tighter guidance. MünchenerHyp’s long nine year was launched with guidance of the minus 10bp area and Commerzbank’s 10 year the minus 8bp area

Probst said WL Bank’s tighter staring point was justified.

“The rationale was that investors would have been disappointed if we started at minus 9bp to price the deal at minus 13bp,” he said. “And starting at either of minus 10bp or minus 11bp meant quoting a double-digit negative spread, either way.

“The deals last week went well in the secondary market and there was room to price at a tighter range,” he added

WL Bank’s deal was deemed to have offered a new issue premium of at most 1bp, with bankers citing WL Bank April 2027s at minus 13bp, mid, and Commerzbank’s new August 2027s at minus 12bp.

Banks were allocated 50.2% of WL Bank’s deal, central banks and official institutions 43.4%, and asset managers 6.4%. Accounts in Germany bought 84.8%, Asia and the Middle East 7.0%, France 3.2%, Austria 2.0%, and others 3.0%.