A €500m five year green debut from Kookmin Bank furthered the South Korean’s standing in the covered bond market today (Wednesday), while Wüstenrot Bausparkasse enjoyed a successful second euro benchmark outing and the longer tranche of a CFF trade outperformed.

Following investor calls, Kookmin Bank leads Credit Suisse, Citi, ING, JP Morgan and BNP Paribas went out this morning with initial guidance of the mid-swaps plus 18bp area for the €500m no-grow October 2026 green issue, rated triple-A. After around two hours, they reported books above €1.1bn, including €110m in JLM interest. After about three hours, guidance was revised to the 15bp area, on the back of books above €1.2bn, including the JLM interest. The spread was ultimately fixed at plus 14bp, with the final order book over €1bn.

A syndicate banker away from the leads said that being two times covered and paying no new issue premium, the result was “good news” for Kookmin.

“We are still talking about an issuer that is fairly new,” he said. “Every new trade is helping them reprice their secondaries tighter.

“It was the kind of trade that was bound to go well,” he added, “because it’s a name that offers some spread – it’s not often you get a positive yield on a five year.”

Syndicate bankers at and away from the leads saw fair value at 14bp, with a lead banker seeing their July 2025s at 13bp. He further highlighted that Kookmin’s pricing was a touch inside Korea Housing Finance Corp (KHFC) June 2026s, which he noted is a €1bn trade.

“We are super-happy with execution and the engagement Kookmin enjoyed on the roadshow for its inaugural green bond,” he added.

Final distribution figures were not yet available, but he said there was decent take-up from green/SRI accounts, and another lead banker noted that the trade attracted new names to what is only Kookmin’s second euro benchmark covered bond, after a €500m five year sustainability issue in July 2020.

“The issuer got a more diversified book than last time,” she said. “Coming frequently to the market helps them as investors want to eventually start opening lines on this name, and that paid off today.”

The new issue is the first pure green covered bond from Korea, but follows a series of social and sustainability covered bonds from the country’s issuers.

Following a mandate announcement on Monday, Wüstenrot Bausparkasse leads Commerzbank, DZ, Helaba, LBBW and UniCredit opened books this morning with initial guidance of the mid-swaps plus 4bp area for the €500m no-grow October 2029 mortgage Pfandbrief, expected rating triple-A. After an hour and 10 minutes, the leads reported books above €1bn, excluding joint lead manager interest. After an hour and 45 minutes, guidance was revised to mid-swaps flat +/-1bp, will price in range, on the back of books above €1.35bn, excluding JLM interest. After two hours, the spread was fixed at minus 1bp, with books above €1.3bn, excluding JLM interest, good at guidance, pre-reconciliation. The final order book was above €1.14bn, excluding JLM interest.

A lead syndicate banker said the trade went very well, noting that no new issue concession was paid. The deal is only Wüstenrot Bausparkasse’s second euro benchmark, after a €500m seven year debut exactly a year ago, which was upsized from a planned sub-benchmark size on the back of strong demand.

The new issue comes after Berlin Hyp on Monday priced a €1bn long eight year at 2bp through mid-swaps, and the lead banker said Wüstenrot had been helped in limiting the differential versus its compatriot to 1bp by the €500m no-grow size, whereas on a like-for-like basis the differential might be 2bp.

A syndicate banker away from the leads said that the positive, 0.129% yield and 0.125% coupon is incrementally helping core supply in the seven to eight year part of the curve.

“It’s not a game-changer,” he said, “but you do get some extra investor here or there now that we are more or less talking about a positive yield in seven years and longer. I’m not saying an eighth coupon is a lot, but given where yield have been, some accounts are happier to participate.”

Compagnie de Financement Foncier (CFF) today generated a larger final order book for a 20 year part of a €1.5bn dual-tranche issue than a six year, with the rates environment cited as a factor in the outcome. A syndicate banker away from the leads noted that the long-dated tranche yielded some 0.60%, versus 0.419% paid by ABN Amro on a €1.5bn 20 year on 10 September, for example.

“This is clearly where we see demand at the moment, given the bump in rates,” he added.

Following IPTs of 3bp over mid-swaps and 10bp, respectively, for €500m-€750m six and 20 year tranches, the combined order book reached more than €3.1bn, and the two tranches were ultimately priced at minus 1bp and plus 5bp, respectively, with final books of €1.1bn and €1.35bn. Both tranches were seen roughly flat to fair value.

BBVA, Commerzbank, DekaBank, Deutsche, IMI-Intesa Sanpaolo, Natixis, NordLB and Swedbank were leads.