Deutsche Hypo is set to sell its second benchmark green Pfandbrief on Monday, after having announced a mandate today (Friday), with the green element seen as a boon in a tricky market for Eurozone paper. Further issuance is expected next week, with longer dated supply foreseen.

Deutsche Hypothekenbank issued its first green Pfandbrief in November 2017, a EUR500m six year issue. It became only the second German issuer to have sold a green covered bond, alongside Berlin Hyp, but the two have since been joined by LBBW.

Deutsche Hypo – a member of the NordLB group – announced this morning that it has mandated ABN Amro, BayernLB, Natixis, NordLB and UniCredit to lead manage the EUR500m no-grow long six year green Pfandbrief.

A syndicate banker at one of the leads said the deal is expected to be launched on Monday.

“We have already received some good feedback and we are confident this will be a good deal,” he added.

Syndicate bankers at and away from the leads said the deal’s green element should help Deutsche Hypo attract stronger demand than some of the weaker Eurozone trades that have been priced since the euro market reopened last week.

“It has not been easy to get Eurozone deals done with tapering concerns and some investors more looking for non-CBPP3-eligible deals, but some trades have still gone well – like BayernLB’s trade on Tuesday,” said a syndicate banker. “I think the green angle will hopefully make up for any investor concerns over CBPP3-elgibile trades or over the NordLB name.”

Syndicate bankers at the leads saw Deutsche Hypo’s green November 2023s trading at minus 14bp, mid, and its conventional May 2024s at minus 13bp and June 2025s at minus 10bp.

The deal will be backed by green commercial real estate loans and issued under Deutche Hypo’s Green Bond Programme, which has a second party opinion from oekom. Under Deutsche Hypo’s framework, all funds raised through green bond issuance will be used exclusively to finance energy efficient real estate.

Deutsche Hypo itself has a corporate sustainability rating of Prime C+ by oekom.

At the time of writing no other euro covered bond deals had been publicly announced for execution next week, but bankers expect supply to continue at a steady pace. A core European issuer is said to be considering launching a long dated euro benchmark in the coming days.