The German Pfandbrief issuer of Italy’s UniCredit group is set to launch its first euro benchmark since June 2017 tomorrow (Tuesday), a seven year, while Deutsche Pfandbriefbank (pbb) is planning to join the recent flurry of US dollar issuance with a three year Reg S trade.

No new benchmark covered bonds emerged today, but the two mandates came out against a market backdrop deemed neutral for covered bonds, even if equities were a little weaker and Bunds a little higher. Syndicate bankers said that overall the market was relatively quiet, with no obviously imminent flashpoints to spark renewed volatility.

“For a covered bond, in any case, it’s technically sound,” said one. “We had some good evidence on recent trades anyway that despite broader volatility there was nonetheless a good dynamic when you get the starting point right.”

The German UniCredit unit announced today (Monday) that it has mandated BBVA, Commerzbank, LBBW, Natixis and UniCredit for a seven year euro benchmark mortgage Pfandbrief for launch in the near future, subject to market conditions.

The new benchmark from UniCredit Bank AG (HVB) will be its first since June 2017, when it sold a EUR500m long six year mortgage Pfandbrief.

UniCredit 2024 to 2026 paper was quoted from 11bp to 9bp through mid-swaps, mid, pre-announcement, according to comparables circulated by the bookrunners, although a syndicate banker at one of the leads noted that these levels are squeezed, and more recently-launched Pfandbriefe in the seven year part of the curve were also cited, at between 8bp and 6bp through.

Syndicate bankers at and away from the leads said it will be interesting to see what influence ongoing concerns around Italy could affect the German subsidiary of the Italian UniCredit.

“That’s the question,” said one. “Do investors look at it through Italian glasses, or take it as what to my mind it is, which is a German Pfandbrief bank that happens to belong to an Italian banking group?

“It’s difficult to forecast just how people will look at it.”

Deutsche Pfandbriefbank is set to launch the fourth benchmark covered bond in US dollars in a month, having mandated BayernLB, Citi, Goldman Sachs, HSBC and Nomura for a three year fixed rate Reg S transaction. The mortgage Pfandbrief is set for launch in the near future, according to the mandate announcement.

The UK’s Lloyds issued a $750m three year Reg S deal at 32bp over mid-swaps last Monday (5 November), after two Canadian 144A benchmarks in mid-October. Pbb’s last dollar benchmark was a $600m (EUR530m) three year issue in April 2017, while its last benchmark was a EUR500m nine year mortgage Pfandbrief at mid-swaps minus 2bp in August.