A EUR500m seven year Pfandbrief for Commerzbank today (Tuesday) was deemed a reasonable success given changeable demand and a tight outright spread, with the book reaching EUR700m. Bank of Ireland is set to sell its first benchmark since 2015 tomorrow, and OCBC is set to debut in sterling.

Commerzbank announced a mandate yesterday (Monday) afternoon for the EUR500m no-grow mortgage Pfandbrief, via leads BayernLB, BBVA, Crédit Agricole, Commerzbank and LBBW.

The deal was launched this morning with guidance of the mid-swaps minus 13bp area. After around one hour and 50 minutes, the leads announced that books were above EUR700m, including EUR100m joint lead manager interest. Just over half an hour later, the spread was then set at minus 15bp.

“It’s gone OK, or at least as well as one could have expected,” said a syndicate banker away from the leads. “The book is clearly not huge, but demand has not been great for many recent deals and so you cannot expect a tight Pfandbrief to be a blowout.

“In that context, 3bp of tightening is pretty decent.”

Another banker away from the leads agreed that the deal had gone well.

“Minus 15bp is a pretty reasonable outcome, given how regularly Commerzbank has been issuing,” he said.

The final spread was seen as incorporating a new issue premium of around 3bp, with syndicate bankers seeing Commerzbank July 2024s at minus 19bp, mid, September 2025s at minus 18bp, and June 2026s at minus 17bp.

Syndicate bankers at the leads also cited as comparables MünchenerHyp June 2024s at minus 20bp, March 2025s at minus 19bp, April 2026s at minus 19bp, and Helaba August 2024s and January 2027s both at minus 21bp.

The deal is the fourth seven year benchmark Pfandbrief from Germany this year, although bankers noted that the last two – a EUR500m issue for apoBank and a EUR500m issue for Deutsche Bank – were for issuers whose Pfandbriefe trade slightly wider than Commerzbank’s. The first, a EUR1bn issue for LBBW on 2 January, was priced at the tightest ever spread for a euro benchmark covered bond, minus 20bp.

“Commerzbank’s spread is a little back of the tights that we were seeing in the Pfandbriefe market at the start of the year, but I doubt you would be able to reach those levels in today’s market,” said a syndicate banker away from the leads. “With demand as it is, minus 15bp is a good level.”

Maureen Schuller, head of financials research at ING, noted that that with EUR2bn of Pfandbriefe maturing in 2018, Commerzbank is one of the best-supported German issuers in terms of the volume of redemptions this year.

On Wednesday, a EUR500m Commerzbank covered bond backed by SME loans matured. The deal was the only benchmark issued off a EUR5bn rare German structured and SME programme.

Bank of Ireland announced a mandate today for a seven year euro benchmark covered bond, via leads Barclays, Credit Suisse, Deutsche Bank, SG and UniCredit. The deal could be launched as soon as tomorrow, according to a syndicate banker at one of the leads.

The deal will be Bank of Ireland’s first benchmark covered bond since October 2015, and the first benchmark from Ireland since January 2016.

Singapore’s Oversea-Chinese Banking Corporation announced a mandate for a sterling benchmark FRN with a five year maturity. The issuer said it is available for calls today and the deal will be launched in the near future, subject to market conditions.Barclays, BNP Paribas, Credit Suisse and OCBC have the mandate.

United Overseas Bank sold the first and to date only sterling covered bond from Singapore on 21 February, a £350m five year FRN.