Euro benchmark covered bond debuts for Shinhan and Oldenburgische Landesbank AG comfortably found homes today (Monday), with the Korean green deal attracting over €2bn of orders. SG SFH is set to test 12 year demand tomorrow in the first issue beyond 10 years in 12 months.

Shinhan Bank’s mandate was announced on 9 January, with a three to five year maturity flagged for the planned debut euro benchmark green mortgage covered bond debut. Upon the conclusion of a roadshow taking in over 50 accounts last week, it was announced on Friday that the issuer was focused on the three year tenor, with launch as early as today.

This morning, leads BNP Paribas, Crédit Agricole, HSBC, JP Morgan, LBBW, Mizuho and SG went out with guidance of the mid-swaps plus 62bp area for the €500m no-grow January 2027 issue, expected ratings Aaa/AAA (Moody’s/Fitch). After around an hour and a half, the leads reported books above €1bn, excluding joint lead manager interest, and after around three hours, they set the spread at 54bp on the back of more than €1.75bn of orders, including €185m of JLM interest, and the final book was above €2bn.

“The book was extremely strong for such an inaugural issue,” said a syndicate banker at one of the leads. “The green nature of the bond really helped – the other Koreans that have already issued have been social or sustainable, but not green.

“And the demand enabled us to slash the pricing – that’s pretty much in line with what we’ve seen on other covered bonds lately, but in the past Korean covered bonds weren’t typically able to tighten as much as Eurozone covered bonds coming at the same time. The great outcome is a testament to the market being ready for this trade, a green three year giving a little bit more spread.”

The deal is the first non-Eurozone euro benchmark covered bond of the year, and the lead banker said this played into demand, while the focus on issuance of five years and longer this year also presented Shinhan with an opportunity.

“Opting for the shorter tenor was a smart strategy,” he said. “The feedback from investors was that they wouldn’t mind seeing threes, if the issuer were open to it, and that contributed to the issuer’s decision, as well as threes having the capacity to offer it the best outcome.”

The issuer also paid a limited new issue premium, according to the lead banker, with fair value see in the mid-50s based on the secondary curves of compatriots Kookmin and KEB Hana. Kookmin 4% April 2027s were seen at 57bp, mid, and KEB Hana 3.75% May 2026s at 50bp, according to pre-announcement comparables circulated by the leads.

After a mandate announcement on Thursday for an eight to 10 year trade and investor calls, Oldenburgische Landesbank AG (OLB) leads Danske, DZ, Deutsche, Erste, NordLB and UniCredit on Friday said the issuer was focused on an eight year transaction, with the balance of feedback coming in the high 50s to 60bp area over mid-swaps.

This morning they went out with guidance of the mid-swaps plus 65bp area for the €500m no-grow January 2032 mortgage Pfandbrief, expected rating Aa1. After around two-and-a-half hours, they reported books above €1bn, including €80m of JLM interest, and thereafter set the spread at 59bp on the back of books above €1.25bn.

A lead banker noted that the issuer was expected to come at the wider end of the German sector, given that it is backed by private equity, its Pfandbriefe are rated Aa1, and – despite its name, it is not a Landesbank.

“Therefore the traditional sector support from the savings banks is not there,” he added, “or at least not to the same extent as a name like NordLB. So it is not the easiest name to explain.

“We felt that 65bp was the right number and so it proved – this was reflected by the order book, which in the end was north of €1.3bn good at re-offer. This is a good success for the issuer, following their Tier 2 debut the other day (€170m on Wednesday), and I believe they definitely appreciated the warm reception they enjoyed from the market – which was something none of us involved took for granted.”

The eight year maturity makes it the second longest Pfandbrief of 2024, following a €500m 10 year for Landesbank Saar (SaarLB) on 10 January that was priced at plus 46bp. The lead banker said the issuer was keen on a long-dated issue and that eight years represented a sensible choice given the degree of price discovery still necessary at the long end of the German curve.

Crédit Mutuel Home Loan SFH meanwhile issued a €1.5bn seven year today, setting the spread at mid-swaps plus 40bp after books topped €3bn.

Societe Generale SFH’s 12 year issue will be the first euro benchmark covered bond beyond 10 years in exactly a year, the last having been a €500m 12 year for Deutsche Kreditbank on 23 January 2023. SG SFH will sell the long dated paper alongside a three year tranche via joint books ABN Amro, BBVA, Crédit Agricole, Danske, DZ, Erste, LBBW, Mediobanca and global coordinator SG.

SG SFH 3.625% July 2026s were seen at 14.5bp, mid, 0.01% December 2026s at 15bp, and 0.75% January 2027s at 22bp, among pre-announcement comparables circulated by the leads, while its 3.125% February 2032s and 1.75% May 2034s were at 40bp and 46bp, respectively.

SG’s planned 12 year comes after La Banque Postale Home Loan SFH on Friday achieved the tightest pricing this year of a 10 year, selling a €750m green covered bond at 45bp over after tightening 8bp on the back of a book that peaked at around €3.7bn. The latest French issue beat the re-offer spreads of three compatriots and SaarLB’s Pfandbrief this month.

Hamburg Commercial Bank (HCOB) is also expected tomorrow after the conclusion to a roadshow for a €500m no-grow two year ship Pfandbrief, according to an update this morning, which said the balance of feedback had come in the context of mid-swaps plus 75bp-80bp.