Danish Ship Finance issued its second euro benchmark today (Wednesday), a €500m no-grow long five year, with its idiosyncratic nature and a disappointing market seen as contributing to limited tightening and demand. Natixis Pfandbriefbank meanwhile sold a sub-benchmark and Yorkshire Building Society mandated a sterling FRN.

Danish Ship Finance (Danmarks Skibskredit) leads Credit Suisse, LBBW, Nordea and UniCredit went out this morning with guidance of the mid-swaps plus 40bp area for the March 2025 shipping loan-backed issue, and after around an hour and a half reported books in excess of €500m, excluding JLM interest. After around three hours, guidance was revised to 38bp-40bp, will price in range, on the back of orders over €615m, including €35m JLM interest, and the spread was then set at 38bp on the back of over €650m of demand. The final book at re-offer was €520m, including €25m JLM interest.

A syndicate banker at one of the leads said the deal was well executed and had allowed the issuer to expand its investor base into new accounts, as well as extend its curve into five years.

“In the beginning, it had good momentum,” he said. “We had books over €500m within an hour of going out, and we priced at 38bp, which is close to flat to their local curve,” he said, “and if you compare it to Deutsche, which didn’t move from IPTs, this looks like it went pretty well.”

A syndicate banker at another of the leads said he was pleased to see the deal completed on what was a “particularly weak day” for the market, citing sluggish transactions across all asset and rating classes.

“It seems like the market was running out of steam today,” he said, “but in the end, we made it over the finish line, but with little pricing power, and the same happened to Deutsche.”

A syndicate banker at another of the leads said the modest demand may have reflected the idiosyncratic nature of the covered bond.

“It’s a bit of a niche and clearly investors have to be comfortable with the collateral,” he said. “Shipping collateral might still remain a tough one for some.”

The banker also said the pricing may have been ambitious.

“We had a bit of price sensitivity between the last and previous updates,” he added, “but we did not beat around the bush or try to hide anything.”

Natixis Pfandbriefbank attracted over €425m of orders to a €250m five year mortgage Pfandbrief. Leads BayernLB, DekaBank and Natixis went out this morning with guidance of mid-swaps plus 6bp-8bp, will price in range, and after around 45 minutes reported books in excess of €250m, excluding joint lead manager interest. After around an hour and a half, the spread was set at 6bp on the back of orders over €400m, excluding JLM interest, and the deal was ultimately priced on the back of over €425m of demand, including €10m JLM interest.

A syndicate banker away from the leads said the sub-benchmark was the “lucky winner” of the trio of trades today.

Yorkshire Building Society is set to launch a benchmark sterling five year FRN soon, after announcing plans today. Leads Barclays, BNP Paribas, Lloyds and UBS have the mandate.