HSH Nordbank today (Thursday) attracted more than EUR1bn of orders to a EUR500m no-grow five year Pfandbrief with the widest spread for a German benchmark in over two years, while RLB Oberösterreich maintained the flow of long-dated issuance with a EUR500m 10 year.

HSH Nordbank announced yesterday (Wednesday) that it had mandated Barclays, BNP Paribas, Deutsche, HSH and NordLB to lead manage its EUR500m no-grow five year Pfandbrief. The deal was launched this morning with guidance of the 22bp over mid-swaps area, which was later revised to the 20bp area. The spread was ultimately fixed at 18bp with books over EUR1bn.

“It went very well, although of course it was very juicily priced,” said a syndicate banker away from the leads. “The starting point was generous, reflected by the fact they tightened 4bp, but you can’t really blame them.

“They made the most out of it.”

The deal is the widest new euro benchmark German Pfandbrief since April 2016, when HSH priced a EUR500m seven year at 23bp, and the first benchmark Pfandbrief to be priced with a positive spread since the issuer priced its last deal, a EUR500m three year, in July 2017.

Bankers noted that HSH Nordbank is an outlier in the tight German Pfandbrief market, with the issuer’s lower ratings – its Pfandbriefe are rated Aa3 by Moody’s – and ongoing uncertainty regarding the issuer’s ownership reflected in its secondary spreads.

“It is uncontroversial – I think that some of the lead managers felt they had to pay this given the name is a bit difficult following all the ‘it must be sold, it cannot be sold, it will be sold nevertheless’ stories,” said a syndicate banker away from the leads.

The final spread of 18bp was seen as incorporating a new issue concession of around 4bp, with bankers citing HSH Nordbank April 2023s at around 13bp, mid.

Following a mandate announcement yesterday morning, RLB Oberösterreich leads DekaBank, DZ, Erste, RBI and UniCredit opened books for the Austrian’s EUR500m no-grow 10 year issue this morning with guidance of the mid-swaps plus 7bp area. After around one hour the leads announced that books had surpassed EUR500m.

Guidance was subsequently revised to 6bp, plus or minus 1bp will price within range, with books above EUR680m, including EUR90m joint lead manager interest. The spread was later set at 5bp, with the book well above EUR700m, including the EUR90m JLM interest.

“It isn’t the most stunning trade, but it seems to have gone to plan and is well oversubscribed,” said a syndicate banker away from the leads.

Syndicate bankers said the deal paid a new issue premium of around 3bp, seeing RLB Noe-Wien January 2028s – the last 10 year benchmark from Austria – trading at around flat, mid.

The deal is RLB Oberösterreich’s second euro benchmark covered bond, following a EUR500m 10 year debut in September 2016.