DZ Hyp is expected to launch a five year euro benchmark mortgage Pfandbrief on Monday, after today (Friday) announcing its plans for the transaction, and the new issue will be the shortest-dated German benchmark since January.

Dekabank, Deutsche, DZ, Natixis, Natwest and Rabobank have the mandate.

The new issue is set to be DZ Hyp’s third euro benchmark of the year, following a €750m four year transaction on 21 January and a €1bn eight year transaction on 17 June.

It will be the shortest-dated Pfandbrief since the issuer’s January trade. German banks have sold two of the four euro benchmarks to have hit the market since its post-summer reopening, but Berlin Hyp opted for a €500m 10 year and MünchenerHyp a €500m 15 year. Japan’s SMBC sold a €1bn five year at a yield of minus 0.168% yesterday (Thursday).

“The five year creates opportunities for those who want to go a little shorter,” said a syndicate banker at one of the leads, “because despite shifts in yields, rates and investor behaviour, there are still a few accounts restricted to up to and not beyond 10 years.”

Oversubscription levels will likely be more modest than that achieved by a €600m long seven year deal from BPCE SFH on Wednesday, he added, which had a bid-to-cover ratio of around 5.3 and was upped from an initial €500m no-grow size.

“Given the richness of German covered bonds and the fact it will not be a will-not-grow transaction, things should be a bit more manageable,” he said.

According to pre-announcement comparables circulated by the leads, DZ Hyp’s June and November 2025s were flat to mid-swaps, mid, and its February 2026s at 1bp over.

“People don’t expect a lot in terms of new issue concession these days,” added the lead banker, “so I think both the issuer’s and the investor’s expectations for this are pretty aligned.”