Belfius Bank sold the first Belgian covered bond benchmark of the year today, a EUR500m 10 year trade that bankers noted had a limited new issue premium compared with recent supply thanks to its no-grow size. Hypo Noe is expected with a EUR500m seven year Pfandbrief tomorrow.

Belfius leads Barclays, Belfius, Commerzbank, Erste and Natixis went out with guidance of the mid-swaps plus 13bp area this morning for the EUR500m no-grow 10 year public sector Pandbrieven transaction. It was ultimately priced at plus 10bp on the back of over EUR850m of orders good at re-offer, excluding joint lead manager interest.

According to pre-announcement comparables circulated by the leads, 2028 mortgage-backed paper from Axa, Belfius and BNP Paribas Fortis was trading at 6.5bp over, mid, Belfius’s 2026 public sector paper at 3.5bp over, and KBC October 2017 mortgage-backed paper at 3.5bp.

Syndicate bankers at and away from the leads noted that the new issue premium was some 2.5bp-3bp lower than that paid by Helaba on a EUR1bn 10 year last Thursday that attracted EUR1.325bn of orders good at re-offer. A lead syndicate banker said he had the impression investors had become more cautious.

“Obviously, the EUR500m no-grow helped the transaction,” said a lead syndicate banker, “and the new issue premium was quite a good result in this kind of environment. In the end, it was a nice transaction.”

He said that the pricing could have been 1bp tighter.

“This is their first covered bond this year and the first Belgian covered this year,” he added, “so the idea was to come with as nice a trade as possible for the issuer and not to tighten as much as possible.”

Syndicate bankers away from the leads generally said the deal appeared to have gone well, agreeing that the limited size had helped constrain the new issue premium.

The deal was priced at a yield of minus 0.066%, equivalent to 50.5bp over the Bund.

Sixty-four investors were allocated, with banks taking 52%, asset managers 29%, official institutions and agencies 16%, and insurance companies and pension funds 3%. Germany and Austria were allocated 45%, France 18%, the Benelux 11%, Italy 8%, Asia 6%, the Nordics 4%, the UK and Ireland 4%, Switzerland 3%, and others 1%.

Hypo Noe announced a mandate today for a EUR500m no-grow seven year public sector Pfandbrief. The deal is expected to be launched tomorrow, via leads DekaBank, DZ, Erste, LBBW and UniCredit.

The Austrian’s last euro benchmark was a EUR500m seven year in August 2018. According to pre-announcement comparables circulated by the leads, Hypo Noe April 2023 and April 2025 paper was quoted at plus 3.5bp and plus 5.3bp, respectively. Hypo Vorarlberg July 2026s were quoted at plus 4.5bp, Raiffeisenlandesbank Niedoroesterreich-Wien August 2026s at plus 3bp, and Raiffeisenlandesbank Oberoesterreich September 2028s at plus 3.5bp.