Berlin Hyp, KEB Hana, Sparebanken Sør and RBC hit the market today (Tuesday), with only the Canadian breaking from recent supply trends and strategies by moving only 2bp from start to finish and ending up less than 1.5 times subscribed, although a lead said the final parameters were an achievement.

Royal Bank of Canada (RBC) leads Deutsche, LBBW, Natixis, RBC, Santander, Société Générale and UBS went out with guidance of the mid-swaps plus 11bp area for a euro benchmark-sized 10 year transaction. After around an hour and 55 minutes, books were reported as being over €1bn, and after around two hours and 40 minutes the spread was set at 9bp on the back of over €1.25bn demand, including €25m JLM interest. The issue was ultimately sized at €1.25bn (C$1.93bn) and the final book was over €1.3bn, including €25m JLM interest.

New issues this year have typically been tightened 4bp during execution and, with fair value for RBC’s new issue seen around 8bp by bankers at and away from the leads, the 11bp starting point appeared overly ambitious to syndicate bankers away from the leads, who said it had hit demand.

“Which deal has started 3bp back of fair value,” said one, “and was also an issuer looking to do €1bn-plus?”

They contrasted execution with a 10 year green covered bond from Norway’s DNB Boligkreditt on Thursday, which attracted over €3.2bn of orders following initial guidance of the 10bp area, and was sized at €1.5bn and priced at 6bp, implying a negative new issue premium of around 1bp.

“Being so aggressive on the pricing just meant RBC did not get the momentum one would expect to see on an RBC deal,” said a banker away from the leads, “as the bookbuild was very slow from the outset.”

Another questioned why the leads had not started with initial guidance of 13bp and then moved to 9bp on the back of a bigger book.

A lead banker said tightening the spread as much as on recent trades had not been anticipated, with the issuer instead pitching for aggressive pricing. He noted that the 10 year duration is not the best fit for RBC’s mortgage assets, highlighting that the last Canadian 10 year euro benchmark was in 2008.

“It’s more a case of extending their overall wholesale balance sheet,” he said, “which is valuable, but it’s not valuable at any price.”

He also said the outcome of DNB’s green covered bond was not an appropriate benchmark for RBC’s new issue.

“Achieving a book that peaked at €1.4bn pre-reconciliation for a 10 year transaction at a deeply negative yield while offering 1bp of NIP and probably only pricing 2bp-3bp wider than we would print a five or seven year is a pretty phenomenal achievement,” he added, noting that the deal is also not CBPP3-eligible.

“We’re very happy with the outcome.”

He said the issuer upsized to €1.25bn from an original €1bn size target.

“This is demonstrative of the good investor response we had.”

After announcing its mandate yesterday (Monday), Berlin Hyp leads ABN Amro, Barclays, BayernLB, Crédit Agricole and DZ went out with guidance of the mid-swaps plus 3bp area for a €500m no-grow 10 year Hypothekenpfandbrief. After around 55 minutes, books were reported as being above €500m, excluding JLM interest, and after around an hour and 35 minutes, the spread was fixed at flat to mid-swaps on the back of over €1.1bn of demand, excluding JLM interest. The final book good at re-offer was over €850m, excluding JLM interest.

The new issue is the fourth €500m no-grow Pfandbrief of the year, following a seven year issue from Aareal at 1bp two weeks ago, and a UniCredit Bank AG (HVB) 15 year and MüHyp short 19 year last week at 3bp and 1bp, respectively.

A lead banker said the “expensive” transaction has paid off given the issuer’s active investor relations policy.

“No yield, no spread, but we had some very decent and high quality interest,” he said, “and all involved are very happy with the result.”

Bankers at and away from the lead saw fair value at around 0bp, based on recent supply and Berlin Hyp’s outstanding non-green issuance, whereas its green Pfandbriefe could point to a level of minus 1bp, noted one.

The new deal indicates that 10 year German Pfandbriefe could soon be priced at a negative spread, suggested to a syndicate banker.

After announcing its mandate yesterday, Sparebanken Sør Boligkreditt leads Commerzbank, Danske, LBBW, SEB and UniCredit went out with guidance of the mid-swaps plus 11bp area for a €500m will-not-grow seven year covered bond. After around an hour and 20 minutes, books were reported as being over €1bn, including €125m JLM interest, and the €500m (NOK5.19bn) deal was ultimately priced at 7bp on the back of over €1.6bn of demand, with more than €1.15bn good at re-offer, including €125m JLM interest.

A syndicate banker away from the leads said the 7bp pricing was impressive and noted that oversubscription was at the upper end of today’s trades.

“There hasn’t been too much stuff from Scandinavia for some time,” he said, “and the region normally goes down well with investors, offering a little pick-up to the Eurozone, so the demand is almost standard.”

After investor calls ahead of its debut issue, KEB Hana Bank leads BNP Paribas, Citi, Crédit Agricole, JP Morgan and Société Générale this morning went out with initial price thoughts of the mid-swaps plus 33bp area for a euro benchmark-sized five year social bond. An initial update reported books over €1bn, and after the spread was revised to 28bp on the back of over €1.7bn of demand, pricing was set at 27bp on the back of a €2bn-plus book, including €100m JLM interest, for a €500m size.