UniCredit HVB attracted some €2.5bn of orders to a €1bn eight year deal today (Tuesday), with “generous” guidance deemed key to demand, while OP executed a less exuberant €1bn seven year. RBI is meanwhile planning a debut, and Danish Ship Finance and Natixis Pfandbriefbank are due shortly.

Following a mandate announcement yesterday (Monday), UniCredit Bank AG (HVB) leads ABN Amro, Commerzbank, DekaBank, DZ, Natixis and UniCredit went out this morning with guidance of the mid-swaps plus 8bp area for the euro benchmark eight year mortgage Pfandbrief. After around 35 minutes, the leads reported books as being over €1bn, excluding joint lead manager interest, and after around an hour guidance was revised to the 6bp area on the back of orders over €1.5bn. After around an hour and a half, the size was set at €1bn and the spread at plus 4bp, on the back of over €2.2bn of demand, including €100m JLM interest. The deal was ultimately priced at 4bp on the back of €2.5bn of orders from over 110 investors good at re-offer.

A syndicate banker at one of the leads said that the deal was the German issuer’s most successful in recent memory.

“They’re definitely ending the funding year on a high with this one,” he said.

However, a syndicate banker away from the leads said that the initial guidance was generous and that the enlarged final book size reflected this.

“It seemed pretty wide, and the fact is you get penalized in terms of how much you can move on the back of it,” he said.

The lead banker agreed that the initial guidance was “generous,” and saw fair value at around plus 1bp, based on HVB’s April 2026 paper and November 2029 paper trading at 0.8bp and 1bp, respectively.

“Starting 7bp wider than fair value and bearing in mind recently, in general, transactions have tightened by 4bp at best, investors were assured a new issue premium of 3bp,” he said. “This definitely motivated them to get their hands on this paper.”

Finland’s OP Mortgage Bank attracted over €1.65bn demand to a €1bn seven year trade.

After announcing OP Mortgage Bank’s mandate this morning, leads Crédit Agricole, Credit Suisse, DZ and OP Corporate Bank went out with guidance of the mid-swaps plus 5bp area for the euro benchmark seven year Finnish mortgage covered bond. After around an hour and 10 minutes, they reported books in excess of €1.1bn, including €100m JLM interest, and after around two hours and 10 minutes they set the spread at 3bp on the back of over €1.4bn orders, including €150m JLM interest. The final order book was over €1.65bn.

A syndicate banker at one of the leads said the trade presented a “very solid” outcome, offering a pick-up of 3bp to fair value, based on the issuer’s own curve.

“We circulated a curve this morning with its September 2025 and June 2027 trading approximately flattish,” he said, “with a super flat curve, so it’s fair to say fair value for an OP seven year was flattish.”

He said that at initial guidance they were offering 5bp of new issue premium, which proved attractive to investors.

“We left 3bp of the 5bp on the table at the end,” he added, “so those who invested liked it in particular for this fact and in the end, a €1.6bn book was very decent.”

The Finnish deal was priced at a marginally negative yield, minus 0.019bp, compared with the one year longer HVB’s positive 0.066% yield, but OP’s lead bankers said this did not contribute to the difference in execution and book size of the two deals. One attributed the German’s greater demand to its “teaser” price.

“We started closer to home and it was a more sensible way to go about it,” he said.

“What’s more,” he added, “it’s quite rare that you can say a Finnish bank is able to price inside a German Pfandbrief.”

Danish Ship Finance is expecting to launch a long five year (March 2025) euro benchmark this week, its leads announced today, after the completion of a roadshow yesterday. According to pre-announcement comparables circulated by the leads, the issuer’s September 2022 paper was trading at 21.5bp over mid-swaps. Credit Suisse, LBBW, Nordea and UniCredit have the mandate.

Natixis Pfandbriefbank AG is set to launch a €250m no-grow five year mortgage Pfandbrief soon, after ending a roadshow for the sub-benchmark today, according to an updated circulated by leads BayernLB, DekaBank and Natixis. According to pre-announcement comparables circulated by the leads, the issuer’s September 2026 and May 2023 paper was trading at plus 6.5bp and plus 4.5bp, respectively.

And Raiffeisen Bank International (RBI) is planning an inaugural euro benchmark mortgage-backed covered bond, after the announcement today of a roadshow starting next Tuesday (19 November). DZ, Mediobanca, RBI, SG and UniCredit have the mandate.