Deutsche Hypo sold a EUR500m green Pfandbrief today (Monday), its second such benchmark, with green demand seen crucial to delivering a solid result, as an official at the issuer described the EUR645m book as being a positive statement of green investor’s trust.

Deutsche Hypothekenbank issued its first green Pfandbrief in November 2017, a EUR500m six year issue, inaugurating a green bond framework used to finance energy efficient real estate.

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

The December 2024 deal was launched this morning with guidance of the mid-swaps minus 6bp area. After around one hour, the leads announced that books were above EUR500m, excluding joint lead manager interest.

Guidance was subsequently revised to the minus 7bp area, plus or minus 1bp will price in range, with books over EUR600m, including EUR45m JLM interest, before the spread was set at minus 8bp with books at EUR680m, including the EUR45m JLM interest, around two hours after launch.

The final book stood at EUR645m with over 30 accounts in, including the EUR45m JLM interest.

“Again, we are very pleased with the high demand for our Green Pfandbrief,” said Sabine Barthauer, member of the board of managing directors of Deutsche Hypo. “We see today’s success as a clear display of trust from ‘green’ investors, especially since many of these investors have already invested in our green Pfandbriefe for the second time.

“In addition, the new asset class has established itself in the market.”

A syndicate banker at one of the leads suggested that if the deal had been a non-green, conventional Pfandbrief the book would probably have been closer to EUR500m-EUR600m and that the final spread may have been 1bp wider.

“It is clearly better than the non-green deals we have seen of similar quality,” he said.

Syndicate bankers said the deal paid a new issue premium of around 4bp, seeing 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.