Deutsche Pfandbriefbank attracted over £675m of orders to a £450m (Eu513m) three year fixed rate covered bond today (Monday), pricing the deal with only a slim new issue premium while still securing an impressive size.

Leads Barclays, BNP Paribas, Credit Suisse and Nomura priced the deal at 63bp over Gilts, down from initial guidance of the 65bp area, on the back of over £675m of orders.

The deal is understood to be one of the largest sterling covered bonds from Germany post-crisis, with pbb’s sterling benchmarks in recent years typically £200m-£300m issues.

Syndicate bankers at the leads said the deal offered a new issue premium of around 2bp-3bp, seeing pbb December 2019s – a £250m fixed rate issue sold in November 2012 – at 58bp. The spread of the new issue was deemed roughly equivalent to the funding level pbb would have been able to achieve in the euro market.

The new issue is pbb’s second sterling-denominated benchmark covered bond this year, following a £250m three year FRN in January.

The deal follows two successful sterling FRNs, a £500m five year for SpareBank 1 Boligkreditt on 6 November that attracted more than £800m of orders, and a £500m five year for Santander UK that attracted over £1.3bn of orders three days later.

TSB Bank is expected to issue an inaugural sterling covered bond later this week, following a roadshow that will start tomorrow to market a benchmark FRN.

“The sterling market is looking very good right now, for all types of issuer,” said a syndicate banker away from today’s deal. “It bodes well for TSB.”