Volksbank Wien enjoyed a successful benchmark covered bond debut today (Monday), attracting over EUR1.6bn of orders to a EUR500m no-grow seven year, but the travails of Deutsche Hypo parent NordLB stymied demand for the subsidiary’s 10 year. Aktia and Axa Bank Europe are due tomorrow.

Volksbank Wien followed up on a roadshow last week and Friday update with the launch of its inaugural euro benchmark covered bond today, as leads DZ, Erste, HSBC, ING and LBBW went out with initial guidance of the mid-swaps plus 17bp area for the EUR500m no-grow seven year mortgage-backed issue this morning.

The deal then followed the template or recent successful trades, as the leads reported books above EUR1bn 50 minutes later, and then revised guidance to 14bp+/-1bp, WPIR, after an hour and a quarter on the back of more than EUR1.4bn of demand. The books were then closed after less than two hours with demand above EUR1.7bn, pre-reconciliation, and the spread set at 13bp.

A syndicate official at one of the leads put the new issue premium at around 2bp, based on fair value of 10bp derived from the curves of other Austrian issuers.

“You have to price it a little wider than the Raiffeisenlandesbanks, which are the better perceived part of the cooperative sector, but inside the Hypos,” he said, “taking into account the history of the sector and that this is its debut.”

RLB Vorarlberg September 2025s were quoted at 10bp, mid, pre-announcement, and RLB Niederoesterreich-Wien August 2026s at 9bp.

“You can’t ask for a better start as an issuer than this,” said the lead syndicate official. “It really hit the spot.”

Deutsche Hypothekenbank, however, failed to continue the trend of multiply-oversubscribed books and price tightening in the buoyant market, as it laboured to EUR740m of demand to price a EUR625m 10 year mortgage Pfandbrief in the middle of initial guidance.

Leads DZ, Helaba, Natixis and NordLB went out with guidance of mid-swaps plus 12bp+/-1bp, WPIR, for a euro benchmark deal, and reported books above EUR500m, excluding joint lead manager interest, after an hour and a half, when they set the final spread at 12bp. Demand eventually reached EUR740m, according to a lead banker, and the size was set at EUR625m.

“It was one of the slower trades of the recent past,” he said. “Last week all the trades went very well, but this was on the soft side of things.

“But it’s still a decent result – given all the noises surrounding NordLB as a group, the issuer can’t be completely unhappy.”

Deutsche Hypothekenbank parent NordLB has been struggling to come up with a solution to strengthen its capital position, although last Monday (18 February) Moody’s changed a review of Deutsche Hypo’s Pfandbriefe (Aa1 for mortgage and Aa2 for public sector) from direction uncertain to review for upgrade following the announcement of a plan from the State of Lower Saxony and the Sparkassen-Finanzgruppe.

Finland’s Aktia Bank is expected with a EUR500m no-grow seven year tomorrow (Tuesday), after a mandate announcement this morning. Crédit Agricole, LBBW, Swedbank and UniCredit are leads.

Aktia’s May 2023s were quoted at mid-swaps plus 3bp, mid, pre-announcement, according to comparables circulated by the leads, while OP Mortgage Bank March 2024s were at minus 1bp, September 2025s at plus 5bp, and February 2029s at plus 8bp.

A mandate for Axa Bank Europe SCF was also announced today, with BNP Paribas, Crédit Agricole, ING, SG and UniCredit set to launch a EUR500m no-grow 10 year deal for the issuer tomorrow.