Deutsche Pfandbriefbank (pbb) stuck to a Eu500m size for a five year mortgage Pfandbrief launched yesterday (Wednesday), with a spokesperson for the issuer saying that it had called the market well in its approach. He also said that pbb is in the “very early stages” of analysing structured covered bonds.

Citi, Commerzbank, Credit Suisse, Deutsche Bank and UniCredit priced the issue at 68bp over mid-swaps, the middle of guidance, after having taken indications of interest on the basis of the mid to high 60s.

A syndicate official at one of the leads said that the deal was launched after pbb decided to follow in the wake of deals for UniCredit Bank AG and Crédit Mutuel Arkéa on Tuesday, which had reopened the market after a few weeks of high volatility and no issuance. Pbb had also held a roadshow to prepare for launch.

“We were on a roadshow prior to this deal, on the road for two weeks covering all the major European centres,” a pbb spokesperson told The Covered Bond Report. “Given the current market environment, timing was important for us.”

As with other issues this week, pbb’s deal came in at the low end of size expectations, the Eu500m size being at the bottom end of the announced Eu500m plus transaction.

“We judged the market quite well when suggesting there would be a Eu500m plus issue rather than a jumbo size transaction,” said the spokesperson.

Officials at the leads put the new issue premium paid by pbb at around 15bp.

“If you look at the premium that we paid over secondary market prices,” said the spokesperson, “it was very much in line with what we see in the markets today.”

German accounts were the main takers of the new mortgage Pfandbrief.

“The split was roughly 78% in Germany, 13% in Scandinavia, 7% in the UK, and 2% in Austria and Switzerland,” said the pbb spokesperson. “That’s very much in line with expectations.”

Banks were allocated 67%, funds 24%, central banks 6%, and corporates 3%.

The spokesperson said that the aim of the roadshow was partly to update investors and partly to position pbb, with the goal of laying the groundwork for a return to the capital markets after a re-entry by pbb into the lending markets.

“It is well known that we went through a major restructuring and realignment of the company,” he said. “So we wanted to tell people how we are now positioned. I think it is fair to say that our business model is different from some of our competitors, given our European reach, and the fact that we have two business lines, which is real estate finance and public sector finance.”

He said that further funding needs would be driven by new business.

“Depending on the new business we originate and the market environment, further issues are possible,” he said. “However, our comfortable liquidity position allows for a gradual re-entrance into the markets.”

As reported on The Covered Bond Report two weeks ago, pbb said at an event on 9 September that it is analysing the possibilities of structured covered bonds. The pbb spokesperson played down any expectations that this would yield quick results.

“We are really in the very early stages of analysing the product,” he said. “That does not mean that we will come to the conclusion that this is a fit for us.”