Landesbank Hessen-Thüringen (Helaba) priced a 10 year public sector Pfandbrief yielding minus 0.068% in the middle of revised guidance today (Thursday) and sized it at EUR1bn on the back of EUR1.325bn of demand, with a lead banker noting that some of the usual suspects were missing from the order book.

After the deal was announced yesterday, leads ABN Amro, BNP Paribas, NatWest and UniCredit this morning went out with guidance of the mid-swaps plus 5bp area for the 10 year euro benchmark-sized trade.

After around an hour and a half they reported books in excess of EUR1bn, excluding joint lead manager interest, and after around two hours guidance was revised to plus 3bp+/-1bp, will price in range, on the back of orders above EUR1.1bn, including JLM interest. The spread was set at plus 3bp on the back of books above EUR1.2bn, including EUR30m JLM interest, after two hours and forty minutes, and the deal size was ultimately set at EUR1bn on the back of EUR1.325bn of demand.

A syndicate banker away from the leads noted that the pricing had only been moved 2bp from initial guidance and left 4bp of new issue premium for investors. Bankers at and away from the leads saw fair value at around minus 1bp, while LBBW on 9 September priced a EUR650m nine year public sector Pfandbrief at 1bp over.

“It’s clear they are going for size with this one,” said the syndicate banker.

A syndicate banker at one of the leads confirmed they had been prioritizing size over price.

“We could definitely have landed as low as plus 2bp,” he said, “but at the end the issuer decided to leave a bit on the table for investors and see where we could size it. With a few more accounts, this might have been EUR1.25bn, but we missed maybe a few orders that we would have normally expected.

“At the end of the day the order book was over EUR1.3bn with a plus 3bp print, which I think is fair considering the new issue premiums we have seen in the past few weeks. All in all, printing a billion was definitely a good outcome.”

Another banker away from the leads said that the issuer had little room for manoeuvre on size given the EUR1.325bn book and suggested the 3bp+/-1bp guidance implied that a 2bp re-offer spread was being targeted.

“It was decent,” he added, “with the minor exception of the spread development.”

The pricing was equivalent to 43.2bp over Bunds.

Helaba’s last benchmark was a EUR750m five year mortgage Pfandbrief in June, which set a then-record low for euro benchmark covered bond yields.