Santander Consumer Bank sold its first sub-benchmark Pfandbrief today (Tuesday), a Eu250m seven year issue that attracted over Eu380m of orders and was priced in line with recent sub-benchmark supply.

Before today’s deal, the German Santander subsidiary had sold only a Eu10m mortgage Pfandbrief, in July. It issued an inaugural senior unsecured benchmark in October, a Eu500m five year, and subsequently announced plans for a European roadshow marketing an inaugural sub-benchmark covered bond debut, which it held last week.

Leads LBBW, Natixis, Santander and UniCredit launched the Eu250m no-grow mortgage Pfandbrief with guidance of the mid-swaps minus 9bp area at around 8:55 CET this morning. The leads announced at around 10:30 that the books had exceeded Eu375m, including Eu20m joint lead manager interest. At 11:35, the spread was fixed at minus 11bp on the back of Eu380m of orders, including Eu20m JLM interest.

“It is a solid trade and a good first step,” said a syndicate banker away from the leads.

Bankers said it was difficult to estimate fair value for the new issue given a lack of comparables, but noted that the pricing was in line with that of a slightly larger, longer Pfandbrief priced by Wüstenrot Bausparkasse on Wednesday. The German building society priced the inaugural Eu300m eight year Pfandbrief at 10bp through mid-swaps, down from initial guidance of the minus 8bp area, on the back of more than Eu550m of orders.

“Minus 11bp looks like a good price and it ties in well with the other sub-benchmark trades we have seen lately,” said a syndicate banker.

Santander’s deal offered an attractive pick-up versus euro benchmark issues from established, triple-A rated issuers, bankers added, seeing such bonds trading at around minus 20bp-minus 18bp, mid.