DNB attracted over €3.2bn of demand to a €1.5bn 10 year green covered bond today (Thursday), with bankers hailing its negative new issue premium and level of demand – the most received by any deal so far this year. MünchenerHyp is set to target the 20 year part of the curve tomorrow.

After announcing the mandate yesterday (Wednesday), DNB Boligkreditt leads BNP Paribas, DNB, ING, LBBW and Société Générale went out with guidance of the mid-swaps plus 10bp area for a 10 year euro benchmark-sized transaction. After around 45 minutes, books were reported as being over €2bn, excluding joint lead manager interest, and after a little over two hours, the spread was set at 6bp on the back of over €3.3bn of demand. The issue was ultimately sized at €1.5bn (NOK15.5bn), on the back of over €3.2bn of orders good at re-offer.

A syndicate banker away from the leads welcomed the “mega-strong” deal, noting that its more than twice-subscribed book was all the more encouraging considering the deal is not CBPP3-eligible. He said the 10 year maturity, issuer name and green nature of the deal each in themselves represented sweet-spots for investors.

“So in my view it’s the perfect opener for the year,” he added. “And it’s only real investor money, which is a testament to how strong the market is right now.”

Another banker away from the leads said the strong result was to be expected given DNB is the flagship Norwegian issuer and typically comes to the market in January, having printed sizeable deals in 2016, 2017, 2018 and 2019. He noted that investors could therefore roll from one issue into another, and a €1.5bn DNB five year issued in January 2016 matures today.

“The segment of investors following them is larger than for other Norwegian names,” he added.

Fair value was around 7bp, according to bankers at and away from the leads, implying minus 1bp of new issue premium. According to pre-announcement comparables circulated by the leads yesterday, its June 2025 green covered bonds were at 1.5bp, mid – inside its non-green November 2024s at 2bp – and its non-green September 2026s and October 2027s at 4.5bp and 5.5bp, respectively.

A lead banker said the pricing was highly impressive and reflected the €3bn-plus order book and lower degree of price sensitivity than for some of this year’s supply.

“This is a luxury element not everyone can claim,” he added.

Münchener Hypothekenbank (MünchenerHyp) is set to launch a very long-dated €500m no-grow mortgage Pfandbrief tomorrow (Friday) after announcing its plans today.

The mandate announcement put the tenor at “approximately 20 years” and, according to a lead banker, it could range from a long 18 year to a 23 year, with the wording left intentionally vague because the issuer wanted to keep its options open in case of a substantial move in rates overnight.

“My guess is that October 2039 – which is plus 5bp in terms of swap yield – should do the trick,” he said, “but you never know – stranger things have happened overnight in the last couple of months.”

The euro benchmark will be the issuer’s third in five months, after a €500m 15 year in September and a €500m 20 year in October. The September 2035s and November 2040s were both quoted at 0.5bp in comparables circulated by the leads, with its April 2039s at minus 0.5bp.