A EUR500m 10 year Pfandbrief for apoBank today (Thursday) suggested clearing levels have been established for German Pfandbriefe as the issuer received EUR780m of orders and gathered momentum, while pricing at the second widest German benchmark spread of the year.

Following a mandate announcement yesterday (Wednesday), Deutsche Apotheker- und Ärztebank (Dapo, or apoBank) leads DekaBank, DZ, LBBW and UniCredit launched the EUR500m no-grow mortgage Pfandbrief this morning with guidance of the mid-swaps minus 4bp.

After around one hour, the leads announced books were over EUR500m, excluding joint lead manager interest. The spread was subsequently fixed at minus 6bp with books over EUR700m, including EUR35m JLM interest. The final book stood at EUR780m, including EUR35m JLM interest.

“The 10 year part of the curve is probably not the most obvious choice in this market, with a lot of volatility over the last few trading days,” said a syndicate banker at one of the leads. “It is very satisfying seeing a tight 10 year German Pfandbrief get such a decent book in these conditions.

“The book got off to a strong start and peaked above EUR800m, and there is nice granularity.”

Syndicate bankers away from the leads said the size of the book was impressive when compared to previous 10 year German Pfandbriefe. The last two German benchmarks in the maturity were deemed to have struggled, with a EUR500m 10 year for WL Bank on 15 March marginally subscribed and a EUR500m 10 year for Commerzbank on 9 April attracting final demand of EUR550m, excluding JLMs.

Bankers said the new issue, along with a EUR500m eight year Pfandbrief for Deutsche Hypo last Thursday, showed how clearing levels for at least some German issuers have widened recently. Deutsche Hypo’s eight deal last week is the widest benchmark Pfandbrief of the year, at a final spread of minus 4bp, and at minus 6bp apoBank’s 10 year is the second widest.

“This is where accounts see value,” said the lead syndicate banker. “It is good to see that the market has, at least for now, a new equilibrium at these levels.”

The syndicate banker noted, however, that some differentiation remains between different German names and banking sectors.

The final spread incorporated a new issue premium of around 4bp-5bp based on the spreads of recently priced Pfandbriefe, said syndicate bankers at and away from the leads, seeing DG Hyp June 2027s at minus 9bp, mid, and WL Bank March 2028s at minus 10bp.

Versus the issuer’s curve the deal paid up around 6bp, added some bankers, citing apoBank March 2023s at minus 14bp, mid, February 2025s at minus 13bp and October 2027s at minus 12bp.