Berlin Hyp is set to reopen the post-summer euro covered bond market for the third year in a row tomorrow (Tuesday), following a mandate announcement this morning for a €500m no-grow five year mortgage Pfandbrief, which will be the first new issue since 8 July.

The German lender has mandated Commerzbank, DekaBank, HSBC, UBS and UniCredit as lead managers, with launch slated for the near future, subject to market conditions, according to today’s (Monday’s) announcement.

Berlin Hyp previously restarted euro covered bond issuance at the end of the summer break in 2019 and 2020, and syndicate bankers away from the leads were not surprised by the mandate announcement.

“Why not?” said one. “There was some activity throughout summer – some corporate supply on the credit side the last couple of weeks – and there has been good investor demand.

“They are a frequent issuer,” she added, “and they tend to go for these more non-traditional market windows and take advantage of exclusivity.”

Five year issuance has been thin on the ground this year, with a €1.5bn five year euro benchmark for CFF on 5 July – priced to yield minus 0.23% – the first in the maturity from a core Eurozone jurisdiction this year.

“Most of the demand or supply has been in seven year or longer dated paper, so it’s a great choice,” she said.

The banker noted that, with credit curves fairly flat, Berlin Hyp could perhaps achieve a more attractive level in a longer duration.

“But they have done quite a few trades this year already,” she said, “so if it fits their redemption profile, then there’s not much to argue against that.”

The euro benchmark will be Berlin Hyp’s fourth this year: its last deal was a €750m 12 year trade – its longest mortgage Pfandbrief benchmark till date – and before that it sold 10 and long six year issues.

Another banker away from the leads said he expects the deal to be priced in the negative single-digits.

“That’s where I would believe it belongs,” he added. “This is an undersupplied market and Berlin Hyp is one of the most established issuers one could think of.”

According to pre-announcement comparables circulated by the leads, Berlin Hyp green October 2025s were trading at minus 4.2bp, mid, its February 2026s at minus 3.5bp, and its February 2027s at minus 3.1bp.

“Let’s see how much new issue premium they have to pay,” said the first syndicate banker.

The last euro benchmarks to hit the market, a €750m DZ Hyp long nine year and a €1bn Crédit Mutuel seven year, paid new issue premiums of around 2bp on 8 July.