NordLB is poised to open order books today (Wednesday) on the first US-targeted benchmark Pfandbrief since the crisis began after yesterday announcing a three year public sector deal that is said to be being talked at a level flat to or slightly wide of achievable euro levels.

Barclays, Bank of America Merrill Lynch, BNP Paribas, Credit Suisse and HSBC have the mandate for the 144A deal, and are said to be talking the transaction in the low 50s over mid-swaps, with the indications of interest coming in from European and Asian accounts this morning boding well for a planned opening of books at the New York open.

Secondary market levels for dollar covered bonds from ANZ, Credit Suisse, DNB Boligkreditt, UBS and Westpac are understood to be being used as comparables for NordLB’s transaction, with an October 2015 DNB issue as the main reference point and a premium being offered over those bonds, which were seen at around 44bp/41bp over mid-swaps.

A syndicate official involved in the deal said that the leads would be aiming to achieve an outcome that “does the Pfandbrief justice”, but noting that NordLB is not a major global funder and that accounts may therefore not be that familiar with the credit.

A syndicate banker away from the leads said that pricing a deal at the level being talked would be a good achievement, and that the addition of a new, or return of a long absent, jurisdiction to the list of those with access to the dollar covered bond market would be a positive development.

The low 50s over is broadly comparable with what the issuer could achieve in euros, he said, perhaps 5bp wider. The price discovery and appraisal process would need to involve overlaying the value of the Pfandbrief onto what is a large difference between the underlying senior unsecured credit of DNB and NordLB, he suggested. He added  that NordLB trades through DNB in euros.