MünchenerHyp attracted over $1.2bn of orders to a $600m long three year Reg S mortgage Pfandbrief today (Tuesday), with Lloyds set to follow with a three year tomorrow. Banco Desio meanwhile drew some EUR2bn of demand to a EUR500m seven year OBG offering some “juice”.

After Münchener Hypothekenbank’s mandate was announced yesterday (Monday) morning, leads Credit Suisse, DZ, HSBC, NatWest, and RBC launched Münchener Hypothekenbank’s $600m (EUR532m) no-grow December 2022 trade this morning, with initial price thoughts of the 30bp over mid-swaps area. After an hour, the leads reported books above the $600m issue size, and around two hours later guidance was revised to 27bp+/-1bp, will price in range, on the back of books in excess of $1bn, excluding joint lead manager interest. The deal was ultimately priced at 26bp over on the back of more than $1.2bn or orders, including $30m joint lead manager interest, pre-reconciliation.

Among four other short-dated Reg S dollar Pfandbriefe this year, the $1.2bn-plus peak of demand has only been topped by a $750m three year LBBW issue on 21 May that was the first green dollar covered bond. A syndicate banker at one of MünchenerHyp’s leads said the final book size at re-offer would be smaller, with not every account willing to accept 26bp, but that the deal was still well oversubscribed.

The deal is MünchenerHyp’s first dollar benchmark in three years – its last having been a $600m three year maturing this Friday – and the lead banker said its rarity and quality contributed to the new issue’s success.

“MünchenerHyp anyway enjoys a good reputation,” he said, “and on top of this, it’s their first dollar in three years, and those interested in it know they won’t get a second chance anytime soon.”

“26bp is a great outcome,” he added.

Of dollar Pfandbriefe, only LBBW’s green covered bond has been priced tighter this year, at 24bp over. That was quoted at 23.5bp, mid, in pre-announcement comparables circulated by the leads yesterday.

Lloyds Bank is expected to follow with the latest three year Reg S dollar benchmark tomorrow, after a mandate announcement this afternoon. HSBC, Lloyds, Standard Chartered and TD are the leads.

The forthcoming deal follows a $750m three year from Lloyds in November 2018, which offered investors a rare opportunity to buy a UK covered bond in dollars.

Banco di Desio e della Brianza’s second ever benchmark covered bond was some four times oversubscribed today, as the EUR500m seven year OBG attracted a peak book of some EUR2.1bn, with around EUR1.9bn of orders good at re-offer.

Leads Banca IMI, BNP Paribas, Crédit Agricole, Mediobanca, SG and UniCredit went out with IPTs of the 63bp over mid-swaps area, before moving to guidance of 50bp-53bp and ultimately pricing the Italian issue at 50bp over mid-swaps.

A syndicate banker at one of the leads said the pricing was around 5bp inside fair value, which he described as “quite an achievement”. The pricing was equivalent to around 77bp through BTPs, he added.

A syndicate banker away from the leads said the outcome was a sign of the times.

“When there is juice and there is spread, that’s where we see the most eye-catching trades,” he said. “Peripheral issues are therefore always those that meet the greatest demand, and this very successful transaction reinforces that view.

“It is a very good print for a small name, double-A rated, and only their second benchmark. I expect to see it performing after pricing, too.”

Banco Desio’s only previous benchmark covered bond was a EUR500m seven year in September 2017, while the last Italian benchmark was a EUR750m long seven year from Mediobanca on 24 June.