Raiffeisen Bank International (RBI) successfully secured €500m of five year covered bond funding today (Monday) after holding off and then adopting a pragmatic pricing strategy, while Achmea, HSBC Canada, a UniCredit Bank Austria green debut, ship and sub-benchmark supply filled a heavy pipeline.

RBI’s mandate for a €500m no-grow five year mortgage covered bond was announced last Tuesday for launch in the near future, and had been expected later in the week. However, market conditions deteriorated and the Austrian held off entering the market.

It then on Friday morning teed up launch by providing an update that marketing had been successfully completed and the deal would be launched early this week, subject to market conditions, with the balance of feedback pointing to pricing in the context of mid-swaps plus the high teens to 20bp.

Leads Crédit Agricole, DZ, Natixis, RBI and UniCredit then proceeded with launch this morning, opening books with guidance of the mid-swaps plus 25bp area for the €500m no-grow May 2027 deal, expected rating Aa1. After close to 45 minutes, they reported books above €600m, excluding joint lead manager interest, and after around two hours, they fixed the spread at 23bp on the back of books above €1bn, excluding JLM interest. Around €1.3bn of orders, including €75m of JLM interest, was ultimately good at re-offer.

“It was probably a little more expensive from the issuer’s perspective than they might have hoped for a couple of weeks ago when we first started discussing this, what with everything that came in the interim,” said a lead syndicate banker, “but it was an achievement in itself that they got so comfortably over the finish line.”

Syndicate bankers away from the leads applauded RBI’s “pragmatic” approach.

“Firstly, it was a good call to stand down last week,” said one, “and then a good call to be pragmatic on spread this morning, because at the end of the day, that’s the only thing you have to work with – the tenor was fine. So, offer some spread, accept the pain, and just get it done – and that worked.

“They even moved the price 2bp, which isn’t a given these days.”

Due to its central and eastern European exposure and the war in Ukraine, RBI’s covered bonds have traded wider than its compatriots’ – according to pre-announcement comparables circulated by the leads on Friday, its January 2028s were quoted at 15bp on an i-spread basis, and its December 2029s at plus 18bp, while RLB Niederösterreich-Wien and RLB Oberösterreich five year deals re-offered on 12 and 20 April, respectively, at 8bp and 7bp were quoted at 4bp and 3.5bp. The lead banker said this consideration and the market backdrop meant that a lot of price discovery was necessary and that the feedback levels cited on Friday were aimed at helping investors prepare.

“The 25bp number we started with this morning was a bit of an eye-catching element to indicate we were going for safety first, with the aim of attracting those who can get their head around the name into putting money to work,” he said, “and the question was how far we would be in a position to drive this in. By and large the concept worked, the deal was more than comfortably subscribed, and upon fixing the price we gathered a few more.

“We all remember their first approach this year, with the dual tranche deal, of which the smaller, 15 year part was cancelled altogether, while the six year just made it across the finish line,” he added. “The bottom line here is that they wanted to achieve something that looked decent or even more than decent, and given the current circumstances and their somewhat eastern Europe-heavy business model, it’s definitely an achievement.”

The lead banker noted that while the market remains far from ideal, conditions had improved from Thursday into Friday and a stable open today, and said there appeared to be little benefit in waiting even longer.

Other issuers appear to be of the same mind, with three benchmarks potentially hitting the market tomorrow (Tuesday), following a slew of mandate announcements today.

“After last week, it’s more of a windows-driven market, just like in senior and other risk assets,” said a syndicate banker on one of the mandated deals. “Not necessarily every day is good, so announce on a Monday and then, just like RBI, if the day after isn’t good, just wait, there’ll be a green day, and then you go.

“There’ll be plenty more mandates announced,” he added, “so it’ll be helpful if we can get done tomorrow.”

UniCredit Bank Austria is set to follow RBI into the market with an inaugural green mortgage covered bond. ING, LBBW, Natixis, RBI and UniCredit have the mandate for the €500m no-grow six year issue due for launch after investor calls today.

According to pre-announcement comparables circulated by the leads, UniCredit Bank Austria June 2027s were trading at mid-swap plus 2.4bp and March 2029s at 5.0bp. They also cited five to seven year Austrian supply (excluding RBI’s new issue) trading at between 3.5bp and 8bp.

Achmea Bank has mandated ABN Amro, BNP Paribas, Deutsche, DZ, Rabobank and UniCredit for a €500m no-grow seven year soft bullet Dutch covered bond. Among pre-announcement comparables, the leads quoted NN Bank September 2028s and September 2029s at plus 6bp.

And HSBC Bank Canada is planning a long five year (September 2027) euro benchmark via HSBC, BMO, CIBC, Danske, Natixis, Rabobank, Scotiabank and Santander.

Hamburg Commercial Bank (HCOB) is planning a rare ship covered bond, having mandated Barclays, Commerzbank, Danske, Deutsche and JP Morgan for a €500m no-grow three year Schiffspfandbrief, which a lead banker said could emerge later in the week. The transaction has an expected rating of A2 from Moody’s and is expected to be ECB repo and CBPP3-eligible and LCR Level 2a, according to the mandate announcement.

HCOB issued benchmark Schiffspfandbriefe under its previous incarnation as HSH Nordbank, but the only current benchmark ship covered bond issuer is Danish Ship Finance (Danmarks Skibskredit).

Raiffeisenverband Salzburg is planning a debut covered bond, a five year sub-benchmark mortgage-backed issue. DZ, Erste, LBBW and RBI have the mandate and investor calls are scheduled for today and tomorrow.

And Canada’s Equitable Bank is planning its second euro covered bond, a sub-benchmark three year, expected rating AA/AA (Fitch/DBRS). Investor calls have been scheduled for today and tomorrow, with Barclays, TD, DZ, LBBW and Scotiabank as leads.