Wüstenrot Bausparkasse today (Thursday) returned to the sub-benchmark market for the first time after a 2017 debut with a EUR250m eight year Pfandbrief that drew EUR340m of orders in what was deemed a “fine trade”. RLB Vorarlberg meanwhile finished a pre-debut roadshow.

Wüstenrot Bausparkasse became the first German building society to issue a Pfandbrief in November 2017, when it sold a EUR300m eight year at mid-swaps on, its only outstanding issue.

Following a mandate announcement yesterday (Wednesday) morning, leads Commerzbank, DZ, LBBW and UniCredit launched the EUR250m no-grow mortgage Pfandbrief with guidance of the mid-swaps minus 2bp area this morning. After around one hour and 25 minutes, the leads announced that books were over EUR250m, excluding joint lead manager interest.

Guidance was subsequently revised to the minus 3bp area, plus or minus 1bp will price in range, with books above EUR340m, including EUR55m JLM interest, before the spread was fixed at minus 4bp. The book remained above EUR340m at re-offer.

“It’s a successful return to the market, which you can’t take for granted, and it shows they now have something of an established investor base,” said a syndicate banker at one of the leads. “The book stayed stable during the 2bp move in the spread, which is probably the normal range of spread tightening for a sub-benchmark issue.”

A syndicate banker away from the leads agreed.

“As sub-benchmarks go this looks like a fine trade,” he said. “It’s well oversubscribed and seems a fair price.”

More than 20 investors participated in the deal. Banks were allocated 60%, central banks and official institutions 30%, fund managers 9%, and others 1%. Accounts in Germany took 88% and the Nordics 12%.

The new issue was deemed to have paid a concession of around 3bp-4bp, with Wüstenrot Bausparkasse’s November 2025s quoted at minus 8.5bp, mid, pre-announcement.

Syndicate bankers at the leads also cited as comparables a recent DekaBank EUR250m September 2025 issue, quoted at minus 9.5bp, and benchmark 2026-2027 deals from Commerzbank and MünchenerHyp, seen between minus 11bp and minus 9.5bp.

Raiffeisenlandesbank Vorarlberg will today complete a European roadshow marketing an inaugural euro benchmark covered bond, which is likely to emerge early next week, according to a syndicate banker at one of the leads.

No other deals have been publicly mandated, however, and syndicate bankers said today’s deal is likely to be the last euro covered bond issue of the week.

“I don’t get the sense there is a huge pipeline in covered bonds right now,” said one.