NIBC and RLB Noe-Wien each sold EUR500m 10 year covered bonds today (Tuesday), pricing their deals with similar new issue premiums and at re-offers of 5bp and flat, respectively, with NIBC finding less demand for its CPT issue despite offering the wider spread.

The 10 year part of the curve has proved popular with issuers in 2018, with today’s new issues taking the number of 10 year euro benchmarks to seven since the turn of the year. Although investor demand is said to be deepest in intermediate maturities, demand has held up for the longer-dated trades.

“Again, we see that 10s are working smoothly,” said a banker away from today’s deals. “Both were well oversubscribed and priced with what are, historically at least, small concessions for a longer-dated trade.”

Following a mandate announcement yesterday (Monday), NIBC leads Commerzbank, ING, NatWest, NIBC and UniCredit launched the Dutch EUR500m no-grow conditional pass-through (CPT) issue this morning with guidance of the 8bp over mid-swaps area.

The spread was ultimately fixed at 5bp, on the back of some EUR900m of orders. The book closed “just shy” of EUR1bn, according to a syndicate banker at one of the leads.

“It’s a very good result and an almost twice subscribed deal, which we’re happy with,” he said. “Due to the very good acceptance of investors, we were able to price the deal at 5bp, down from the 8bp start.”

The deal is NIBC’s first benchmark covered bond since May 2016, when it sold a EUR500m 10 year. That June 2026 issue was seen trading at flat, mid, and bankers estimated that the new issue therefore offered a concession of around 3bp.

Raiffeisenlandesbank Niederösterreich-Wien (RLB Noe-Wien) announced yesterday that it had mandated Barclays, Erste, ING, NordLB and RBI to lead manage its 10 year mortgage-backed issue. The EUR500m no-grow deal was launched this morning with initial guidance of the 4bp area. The spread was ultimately fixed at flat, with books closing at EUR1.25bn.

The new issue is the second Austrian benchmark of the year, following a EUR1bn 10 year for Erste that was priced 6bp through mid-swaps last Tuesday.

Today’s deal was deemed to have offered a new issue premium of around 3bp, with bankers seeing the Erste January 2028s at around minus 8bp, mid, and noting that RLB Noe-Wien trades wider than Erste across the curve.

Bankers away from the two deals noted that RLB Noe-Wien’s trade attracted greater demand despite being priced 5bp tighter.

“It’s a somewhat surprising and interesting development, as we have previously seen in this January window that investors flock to the deal that offers more spread and have not seemed overly concerned about questions of the issuer name – within reason,” said a syndicate banker. “It could be that given the choice of a CPT or a hard bullet issue, some investors preferred the latter.”