Bawag PSK issued its fifth euro benchmark of the year today (Thursday), a €750m four-and-a-half year mortgage Pfandbrief that showed the market able to digest yet further Austrian supply, even if shorter maturities and higher new issue premiums are required.

After a mandate announcement yesterday (Wednesday), leads BayernLB, Commerzbank, DZ, Erste, LBBW and UBS this morning went out with guidance of the mid-swaps plus 18bp area for a euro benchmark-sized May 2027 mortgage Pfandbrief, expected rating Aaa. After around 50 minutes, they reported books above €1bn, excluding joint lead manager interest, and after around two hours and 10 minutes, they set the spread at 17bp and the size range at €750m-€1bn on the back of books of some €1.25bn. The deal was ultimately sized at €750m, with the book closing at €1.04bn, excluding JLM interest.

The euro benchmark is Bawag PSK’s fifth of the year, taking its issuance to €4bn, more than double the amount it has raised in any previous year – and with Austrian supply overall having hit record levels. The four-and-a-half year maturity is meanwhile the shortest the issuer has tapped in 2022.

A syndicate banker at one of the leads acknowledged that line availability has been an issue for Austrian credits, but said Bawag PSK had achieved a “rock solid” result. He cited the €750m size and the tightening by 1bp, which he said implied a new issue premium of 8bp. Bawag PSK January 2027s were seen at 8bp, mid, according to pre-announcement comparables circulated by the leads, and its January 2028s at 9.5bp.

“Given how active they’ve been, plus the fact that it’s still a sort of challenging environment, and quite a few accounts are already done for the year, it’s a decent transaction in being very much within the parameters of what we’ve seen recently for new issues, with one or two notable exceptions,” said the lead banker.

“The market has had to come to grips with all the Austrian supply, and I think it has done so,” he added. “Getting away five deals is quite an achievement.”

The final size of €750m was nevertheless at the lower end of that flagged as possible in the second update during execution, with the book dropping around €250m after the size range and final spreads were announced.

Oma Savings Bank meanwhile tapped its outstanding €350m December 2026 issue for €250m, taking the line to €600m and making it the Finnish issuer’s first deal of benchmark size.

After a mandate announcement yesterday, leads Danske, Erste and LBBW today priced the tap at 27bp over mid-swaps and sized it at the expected €250m, on the back of a final book above €325m, including €10m of JLM interest, and following guidance of the 27bp area and with the outstandings having been quoted at 9bp. The 27bp re-offer spread also compares with 23bp for a €300m five year Mortgage Society of Finland issue on Tuesday and 20bp for a Sp Mortgage Bank €750m five year on 24 October, that was trading at 19bp.