Berlin Hyp issued its fifth and largest euro benchmark of 2021 today (Monday), opting for €1bn long eight year at a level bankers said struck a fair balance between size and price. Danish Ship Finance, Kookmin and Wüstenrot Bausparkasse are all in the euro pipeline, while RBC is due in sterling.

After a mandate announcement on Friday, Berlin Hyp leads ABN Amro, BayernLB, Crédit Agricole, DZ and HSBC went out this morning with initial price thoughts of the mid-swaps plus 1bp area for the January 2030 euro benchmark mortgage Pfandbrief, expected rating triple-A. After 55 minutes, they reported books above €1bn, including €110m in joint lead manager interest. After one hour and 45 minutes, the size was set at €1bn, and guidance revised to the minus 2bp+/-1bp, will price in range, on the back of books above €1.65bn, including €155m in JLM interest. After two hours and 15 minutes, the spread was fixed at minus 2bp on the back of books above €1.45bn, with JLM interest unchanged, at guidance, and the final order book good at re-offer was above €1.46bn.

“The pricing was not at the very extreme end of potential expectations, or fears, depending on how you look at it,” said a banker at one of the leads. “So there is something in it for everyone.

“My take from this is that the issuer opted for a good balance here, and the market definitely deserved a €1bn trade for a change.”

Berlin Hyp opened the post-summer market with a €500m no-grow five year mortgage Pfandbrief in late August, and its three previous euro benchmarks this year were for €500m-€750m.

“Had they done smaller, I would’ve expected a little tighter pricing,” said a syndicate banker away from the leads. “But it was clear from the outset that they were having a go at a little bit larger size, so a very, very solid trade from an issuer that has also been in the market several times.

“It goes to show that even tight German bonds work well in the market.”

But another banker away from the leads noted how the order book shrank as the pricing was tightened.

“They lost some couple of hundred million during the execution phase, which sheds a bit of another light on this transaction,” he said. “They priced with a 1bp concession given the huge size they took out, and I assume there has been a bit of sensitivity among investors.”

Bankers at and away from the leads put fair value at minus 3bp. According to comparables circulated by the leads this morning, Berlin Hyp May 2029s were quoted at minus 3.9bp, mid, and its green September 2030s at minus 3.8bp.

Wüstenrot Bausparkasse AG is planning a €500m no-grow eight year mortgage Pfandbrief, with Commerzbank, DZ, Helaba, LBBW and UniCredit having the mandate. A syndicate banker said they expect to wait until Wednesday to launch the new issue, with the launch of the first EU NextGen green bond for €12bn set to dominate activity tomorrow.

Danish Ship Finance is planning a €500m no-grow seven year covered bond backed by shipping mortgages, with expected rating A by S&P, according to a mandate announcement today. Credit Suisse, Danske, DekaBank and SEB are joint leads for the issuer’s third euro benchmark, which could hit the market on Thursday, subject to market conditions, according to a syndicate banker at one of the leads.

“It’s a bit of a unique issuer,” he said. “Investors can expect a bit more spread compared to conventional European covered bonds and probably also a bit more spread compared to other Nordic names.”

South Korea’s Kookmin Bank is planning to hold investor calls from tomorrow for a five year debut green covered bond. Credit Suisse, Citi, ING, JP Morgan and BNP Paribas have the mandate.

Royal Bank of Canada (RBC) is due shortly with a five year Sonia-linked sterling benchmark, following a mandate announcement today. HSBC, RBC, Santander, Scotiabank and Standard Chartered have the mandate.

The bank recently sold a €1.25bn seven year covered bond on 28 September and a $2.5bn five year on 7 September. The last sterling FRN covered bond was a £850 five year Sonia-linked debut for Singapore’s United Overseas Bank (UOB) on 14 September, while Canada’s Bank of Nova Scotia issued an inaugural £1.5bn five year floater on 8 September at plus 28bp.