BayernLB attracted more demand to a EUR500m nine year Pfandbrief today (Tuesday) than Hypo Vorarlberg was able to for a wider and rarer EUR500m eight year issue, with the German gathering greater momentum in execution. Meanwhile, CBA yesterday added to renewed US dollar activity.

BayernLB announced a mandate yesterday (Monday) afternoon for its EUR500m no-grow nine year public sector Pfandbrief. Leads BayernLB, Erste, Helaba, Natixis and UniCredit launched the deal with guidance of the mid-swaps minus 6bp area this morning. After one hour, the leads announced that books had exceeded EUR500m, excluding joint lead manager interest.

Guidance was subsequently revised to the minus 8bp area, plus or minus 1bp will price within range, with books over EUR740m, excluding JLMs. The spread was later set at minus 9bp with books above EUR800m, including EUR20m JLM interest. The final book stood at EUR740m good at re-offer.

The re-offer of minus 9bp was deemed to offer a new issue premium of around 6bp versus the issuer’s secondaries, with BayernLB January 2026s seen at around minus 16bp, mid, and January 2028s at around minus 14.5bp.

However, bankers said the concession was more modest if derived from the spreads of more recent Pfandbriefe. Last Tuesday MünchenerHyp priced a EUR500m long nine year Pfandbrief at minus 8bp. The November 2027 issue was seen trading at around minus 9bp, mid, today.

Following a mandate announcement yesterday, Hypo Vorarlberg leads Commerzbank, Deutsche, DZ, LBBW and SG launched the EUR500m no-grow eight year mortgage-backed issue with guidance of the mid-swaps plus 9bp area. Around one hour and 15 minutes later, the leads announced that books were over EUR500m, excluding JLM interest.

Guidance was subsequently revised to the 8bp area, plus or minus 1bp will price within range, with books around EUR600m, including EUR25m JLM interest. The spread was later set at 7bp with books over EUR600m, pre-reconciliation and excluding JLMs.

Bankers said the deal offered a new issue premium of around 2bp-3bp, seeing Hypo Vorarlberg February 2025s – the issuer’s longest dated outstanding – at around 1bp, mid.

The deal is Hypo Vorarlberg’s fourth euro benchmark covered bond. Its last new benchmark covered bond issue was a EUR500m seven year in May 2017.

Commonwealth Bank of Australia yesterday printed a $1.25bn (EUR1.06bn, A$1.67bn) five year covered bond at a final spread of 40bp over mid-swaps, down from initial price thoughts of the low 40s over mid-swaps area.

The deal was CBA’s first benchmark US dollar covered bond since July 2015 and the first from any Australian issuer since November 2016.

The US dollar covered bond market has remained dormant for much of the year, but was reopened by Canadian Imperial Bank of Commerce on 20 June, with DNB Boligkreditt following the next day.