UniCredit (HVB) achieved tight pricing and strong demand on a €500m five year debut green Pfandbrief today (Monday), despite a volatile market. With a Sp Mortgage Bank €500m deal due, September will be the busiest month of 2021, and Iceland’s Arion has joined the sub-benchmark queue.

After a mandate announcement by UniCredit on Monday of last week followed by premarketing and an update on Friday, UniCredit Bank AG (HVB) leads ABN Amro, Crédit Agricole, LBBW, Santander and UniCredit opened books this morning with initial guidance of the mid-swaps plus 3bp area for the €500m no-grow September 2026 mortgage Pfandbrief, expected rating Aaa. After 35 minutes, they reported books above €1.2bn, excluding joint lead manager interest. After an hour and five minutes, they revised guidance to minus 1bp+/-1bp, will price in range, on the back of books above €2.2bn, excluding JLMs. After one hour and 40 minutes, the spread was set at minus 2bp on the back of an order book of €2.4bn, excluding JLM interest, pre-reconciliation, and the final order book was above €2.4bn.

A lead syndicate banker said the current volatility in the market meant there was “a question mark” when considering whether they should go out with the deal this morning.

“But then we said, hey, it’s a five year green Pfandbrief, and if anyone can do it in such challenging market conditions, then a covered bond can,” he said.

Another lead banker echoed this, noting that it was also a debut green Pfandbrief for UniCredit HVB, and limited at €500m.

“I believe there were a lot of no-go calls across asset classes this morning,” he added, “and it was a strong call to go out with the trade today, but it went extremely well.”

He put fair value minus 2bp, implying zero new issue concession, and a banker away from the leads agreed on this, calling it a strong outcome for the issuer. The undersupplied five year maturity also helped, he added.

The euro benchmark is UniCredit HVB’s fourth this year, for a total of €2.25bn.

Sp Mortgage Bank plc is planning to issue a €500m no-grow seven year covered bond, according to a mandate announcement today (Monday). BNP Paribas, LBBW, Nordea and Santander are leads. The Finnish issuer last issued a euro benchmark, with the same size and tenor, in June 2019.

According to pre-announcement comparables circulated by the leads, those June 2026s were quoted at mid-swaps flat, while Aktia March 2026s, Nordea June 2027s and OP April 2028s were all quoted at minus 6bp.

According to ABN Amro senior fixed income strategist Joost Beaumont, September issuance totalled €12.3bn after last week’s near €5bn of deals, meaning euro benchmark issuance is on the verge of overtaking January’s €12.8bn and making this month the busiest of the year.

A fourth sub-benchmark joined the pipeline today, adding to the high level of activity.

Iceland’s Arion Bank is planning a €300m (ISK45.3bn) no-grow five year sub-benchmark covered bond, which is set to be the first publicly-issued euro-denominated covered bond from an Icelandic bank. Barclays, Deutsche and UBS have the mandate.

Austria’s Bausparkasse Wüstenrot AG concluded its roadshow on Friday, with a €300m seven year debut sub-benchmark via Erste, LBBW, NordLB and UniCredit due to follow as early as tomorrow.

According to pre-announcement comparables circulated by the leads, Oberbank and Hypo Noe September 2028s were quoted at plus 3.7bp and plus 2.5bp, mid, respectively, and Bawag September 2029s at minus 0.7bp.

Kommunalkredit Austria is planning a €250m five or seven year sub-benchmark with DZ, Erste, Helaba and RBI as leads.

And Norway’s Møre Boligkreditt held investor calls on Friday for a debut green covered bond to be launched this week, a €250m (NOK2.55bn) no-grow five year deal with LBBW, Santander and Swedbank as leads.