Deutsche Bank today (Wednesday) built one of the largest books for a German Pfandbrief this year, with demand peaking at over EUR1.1.bn for a EUR500m long seven year issue that is the widest German benchmark since August, albeit with only a minimal premium.

Leads Deutsche, Commerzbank, Natixis, SG and Swedbank launched the EUR500m no-grow August 2025 mortgage Pfandbrief with guidance of the mid-swaps minus 8bp area. The leads later announced that books had exceeded EUR750m, and subsequently revised guidance to the minus 10bp area, plus or minus 2bp will price within range.

The deal was ultimately priced at minus 12bp on the back of more than EUR1.1bn of orders, including EUR20m joint lead manager interest.

The final size of the order book was not disclosed at the time The CBR went to press, but if it remained at or above EUR1bn post-reconciliation, the deal is the first benchmark German Pfandbrief to be at least twice subscribed since November.

“It went very smoothly,” said a syndicate banker away from the leads. “Not many German Pfandbrief have attracted EUR1bn plus demand recently, and that is an even more impressive result bearing in mind they paid very little new issue concession.”

The deal was deemed to have paid a new issue premium of at most 1bp, with bankers citing Deutsche August 2024s at minus 14bp-13bp, mid.

However, the deal, rated Aaa by Moody’s, is the widest euro benchmark triple-A rated Pfandbrief since August, when Commerzbank priced a EUR750m seven year at minus 11bp.

Bankers said the new issue offered an attractive pick-up versus the Pfandbriefe of the tightest trading names in the market, as recent benchmark deals from LBBW, BayernLB and Helaba, with maturities from six to 10 years, were today trading at around 20bp or tighter. The most recent benchmark Pfandbrief, a EUR500m straight seven year for apoBank, was priced at minus 16bp and seen trading at around re-offer.

“Deutsche trades wider than its peers across the curve, so that pick-up is appropriate,” said a syndicate banker away from the leads. “The fact it paid a bit of a premium, along with the limited size, surely helped them attract this strong demand.”

The deal is Deutsche’s first new benchmark Pfandbrief since August 2016, when it sold a EUR500m 12 year. Its Spanish unit, Deutsche Bank SAE, has since sold a benchmark cédulas, a EUR1bn five year in December 2016.

After Deutsche’s deal was priced, wider markets were once again struck by volatility after the release of higher than expected inflation figures in the US. European stock markets subsequently lost gains made this morning.

However, covered bond spreads remained unaffected, as they have been throughout the volatility of recent weeks, and bankers said the prospects for new benchmark issuance were unchanged.

“There are a couple issuers that have been looking at the market, and more and more are leaving blackouts,” said a syndicate banker. “Next week looks like a good window, with regards to data points, so I would expect to see more activity than we have seen this week.

“If people anticipate more supply next week, and hence more competition, there would be an argument for coming to the market this side of the weekend. However, issuers will have to take a view on the new volatility following the CPI inflation numbers.”