Deutsche is poised to sell an inaugural benchmark structured CPT covered bond soon, after updating on its plans today (Monday), while UniCredit HVB is due with an eight year mortgage Pfandbrief, after Volksbank Wien today attracted €1.15bn of orders to a “textbook” €500m no-grow 10 year.

Following meetings with investors, Deutsche Bank today said its five year conditional pass-through euro benchmark will be launched in the near future, subject to market conditions. Barclays, BBVA, Commerzbank, Crédit Agricole, Deutsche and TD have the mandate for the deal, which is expected to be rated Aa1 by Moody’s and AA by DBRS.

Deutsche set up the structured covered bond programme in 2016, but has not previously issued publicly off it. The transaction will be the most notable test case for structured covered bonds out of Germany since Commerzbank successfully sold a €500m five year deal backed by loans to small and medium-sized enterprises (SMEs) in February 2013, after which no further benchmarks were issued off the programme.

This week’s supply was opened by Volksbank Wien this morning with its second euro benchmark, a €500m no-grow 10 year trade that was priced with no new issue premium, according to a lead syndicate banker.

Leads Commerzbank, Deutsche, DZ, Erste and LBBW went out this morning with guidance of the mid-swaps plus 11bp for the 10 year €500m no-grow Austrian mortgage covered bond. After around an hour and 10 minutes, books were reported as being above €900m, including €102m joint lead manager interest, and after around an hour and 50 minutes, above €1.1bn, including the same JLM interest, with guidance at that second update revised to 8bp+/-1bp, will price in range. After around two and a half hours, the spread was fixed at 7bp on the back of orders over €1.2bn, including €117m JLM interest, pre-reconciliation. The deal was ultimately priced at 7bp on the back of 54 orders totaling above €1.15bn good at re-offer.

The lead syndicate banker said it was a “textbook trade” that succeeded in meeting the issuer’s aims.

“It was a little more than twice subscribed, which is OK,” he said. “Landing at 7bp was a bit on the tight side, pricing flat to the curve, but all in all, it went very much as planned.”

He calculated fair value based on the issuer’s March 2026 paper at 4bp, then adding 1bp per year for the curve extension, coming to plus 7bp for the new 10 year.

Syndicate bankers away from the leads agreed that although the book size was not “super extensive”, in the words of one, it was difficult to criticize the deal on this basis. One nevertheless said the deal indicated that the covered bond market is not “fully on fire”.

“Suppose the 40% ECB bid is removed, what would the order book have looked like then?” he said. “Fundamentally, in terms of absolute spreads and yield, a lot of investors are looking at other asset classes.”

Banks were allocated 37%, funds 35%, central banks and official institutions 25%, and insurance companies 3%. Germany was allocated 49%, Austria 18%, Scandinavia 19%, Switzerland 9%, the Benelux 3%, and others 2%.

UniCredit Bank AG (HVB) announced plans for its eight year benchmark-sized mortgage Pfandbrief today, which will be executed in the near future, subject to market conditions. ABN Amro, Commerzbank, DekaBank, DZ, Natixis and UniCredit have the mandate.

According to pre-announcement comparables circulated by the leads, HVB’s May 2026s were trading at mid-swaps plus 0.8bp and its January 2029s at plus 1bp. Its last trade was a €750m five year in September.

“They can do quite large sizes, which I would expect here,” said a syndicate banker away from the leads.

He said that the deal makes “perfect sense” as it is likely to come with a positive yield.

“There is definitely a window for issuers now,” he added, “considering last week’s trades and the ECB’s activity in the primary market. I think some issuers will choose to go ahead and maybe prefund.”

Another syndicate banker said issuers will now be asking whether spreads are going to meaningfully improve over the course of the next two weeks, or whether there is a downside risk in waiting until the new year.

“Suppose the buying of the ECB shifts to secondary, taking comps to unrealistic levels and you then the real investor base that buys this stuff disengages?” he said. “If you’re balancing your decision on timing, these are the competing forces at the moment.”