A sharp back-up in yields today (Wednesday) meant that a Berlin Hyp green Pfandbrief that had been expected to have a negative yield, didn’t, and the German issuer and Toronto-Dominion Bank ultimately found strong demand for EUR500m no-grow and EUR1.25bn eight year trades, respectively.

When Berlin Hyp announced plans for its fourth green Pfandbrief yesterday (Tuesday), the deal had been widely expected to be priced in negative territory, in which case it would have been the longest negative-yielding euro benchmark covered bond and the first green covered bond in euros with a negative yield.

However, the 10 year Bund yield rose as much as 7bp today – its biggest increase in over a year, according to Reuters – and Berlin Hyp’s deal was ultimately priced at a zero yield. Surprisingly strong French economic data was one factor cited as driving the sharp move, although some market participants suggested the previous lows were simply overdone.

“We did not complain, because it helped us,” remarked a syndicate manager on one of the eight year trades.

Berlin Hyp leads Crédit Agricole, Commerzbank (a late replacement for Natixis, which was named on Tuesday’s mandate announcement but was today a lead for TD) HSBC, JP Morgan and LBBW this morning opened books on the EUR500m no-grow green mortgage Pfandbrief with initial guidance of the mid-swaps plus 1bp area. After a little over an hour and a quarter the leads reported books above EUR1bn, including EUR150m joint lead manager interest, and with books above EUR1.3bn, including EUR150m JLM interest, after around an hour and three quarters, they revised guidance to minus 2bp+/-1bp, WPIR. The final spread was set at minus 3bp on the back of books above EUR1.7bn, including EUR100m JLM interest, pre-reconciliation.

A syndicate banker at one of the leads played down the extent to which a negative or positive yield would have affected the outcome.

“I’m not sure how much that mattered,” he said. “It was a great trade, regardless.

“People are happy as long as it’s not massively negative – either in yield or in spread.”

He put fair value at minus 4bp-3bp.

The green nature and limited size of the transaction helped Berlin Hyp achieve “among the best books we have seen” in terms of quality, according to the lead banker, who noted that investors classified as green took 51% of the bonds.

A banker away from the leads suggested a handful of accounts would not have been able to participate due to pricing above par, thanks to a 0.01% coupon, but said that the green aspect of the new issue will have more than compensated for this.

“Green opens a few pockets that might otherwise have been shut,” he said. “It was very decently oversubscribed.”

Germany was allocated 41.5%, the Nordics 13.0%, the UK 8.9%, Asia 8.4%, France 8.2%, Austria and Switzerland 7.2%, the Netherlands 4.3%, and others 8.5%, with 15 countries involved. Banks took 48.3%, funds 30%, and central banks and official institutions 21.7%.

Toronto-Dominion Bank’s eight year benchmark comes just a week after CIBC issued a EUR1bn eight year covered bond. CIBC cited a desire to attract the widest possible range of accounts by offering a positive yield, and a lead manager for TD said its trade followed a similar approach – as did the pricing development.

TD’s initial guidance of the 13bp over mid-swaps area for its euro benchmark-sized trade was also the same as CIBC’s. Leads Banca IMI, Danske, DZ, Natixis, TD and UniCredit reported books above EUR1bn, excluding JLM interest, after a little more than an hour, and revised guidance to 10bp+/-1bp, WPIR, after around two and a quarter hours, with orders above EUR1.8bn. The Canadian ultimately set the spread at 9bp and the size at EUR1.25bn (C$1.84bn), with around EUR1.8bn of demand good at re-offer – again, similar to CIBC.

A lead syndicate banker said the deal had gone very well, noting that TD had priced a deal EUR250m larger than CIBC’s, with the make-up of the book comfortably allowing for this and potentially an even larger trade. He said that the 80-plus orders in the book was quite granular compared to some recent new issues.

“TD, as has been said, is like the non-European Rabobank,” he added, “so it is never difficult to find some decent buyers.”

TD’s new issue yielded 0.107%, versus 0.041% for CIBC’s eight year.

Its euro benchmark comes just two days after it sold a $1.75bn three year dollar benchmark