Sparebanken Sør Boligkreditt attracted modest demand for a €500m no-grow seven year covered bond today (Friday), but bankers said the window for euro benchmarks is still open, and UniCredit HVB is due with a green debut next week while three sub-benchmarks are officially in the pipeline.

After a mandate announcement yesterday (Thursday), Sparebanken Sør Boligkreditt leads Commerzbank, Crédit Agricole, Danske, Natixis and Swedbank went out this morning with initial guidance of the mid-swaps plus 7bp area for the September 2028 issue, with an expected Aaa rating. After about three hours, books above €550m were reported, and guidance was then revised to plus 5bp+/-1bp, will price in range, on the back of books above €725m, including €110m in joint lead manager interest. After more than three and a half hours, the spread was fixed at plus 4bp. The final book at re-offer was slightly below €725m, pre-reconciliation, according to a lead banker.

He noted the slower bookbuilding process and attributed the outcome to the amount of Norwegian supply this year.

“It wasn’t a huge book, but there were good quality orders,” he added, “and I don’t think it was anything to do with it being a Friday.”

Last Friday, ABN Amro issued a record €1.5bn deal with a 20 year maturity on the back of an order book above €2.5bn.

“So it’s not that the day was wrong,” said the lead banker. “It’s just that there’s maybe a little bit of resistance somewhere. There has been quite some Norwegian supply this year, so it’s getting a little bit easier for investors to pass, or maybe just put in small orders.”

He put new issue premium at 1bp-2bp, and said that from the start the strategy was to not give a very wide guidance.

“Clearly, oversubscription is lower than most of the deals we saw in the last two weeks,” he said, “but all in all, a respectable trade at a historically very good spread.”

And a syndicate banker said that the window for covered bonds in generally remains favourbale.

“Particularly if you price with a little bit of a premium on it,” he added, “or come from a totally uncontroversial jurisdiction, a well-known issuer with ECB backing. I’m sure we can still execute trades, as we have seen for this week.”

Seven euro benchmarks totalling €4.95bn hit the market this week, keeping up a brisk pace of supply after last week proved to be the busiest of the year, with seven issues totalling €6.35bn.

After announcing plans to launch an inaugural green Pfandbrief on Monday, Germany’s UniCredit Bank AG (HVB) is expected to hit the market early next week with a €500m no-grow five year mortgage covered bond. It announced today that ABN Amro, Crédit Agricole, LBBW, Santander and UniCredit have the mandate.

According to pre-announcement comparables circulated by the leads, HVB November 2025 to September 2028 Pfandbriefe were quoted at between minus 2.4bp and minus 2.1bp, mid, while NordLB green September 2026s re-offered on Wednesday at minus 1bp were quoted at minus 2.3bp.

Three sub-benchmarks are also in the pipeline.

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

Norway’s Møre Boligkreditt has been holding investor calls today for a debut green covered bond, to be launched next week. LBBW, Santander and Swedbank have the mandate for the €250m no-grow five year deal.

And Bausparkasse Wüstenrot is planning a €300m no-grow seven year debut sub-benchmark via Erste, LBBW, NordLB and UniCredit, following investor calls ending today.

Photo: Lindesnes lighthouse on Norway’s southernmost tip in Sparebanken Sør’s home region