Hamburger Sparkasse issued the first green euro benchmark covered bond of 2026 yesterday (Tuesday), a €500m seven year debut Green Pfandbrief that benefited from its scarcity and ESG credentials to achieve a strong result in terms of demand and price, according to Haspa’s Felix Zillmann.

Haspa’s green finance framework was published in November and the new issue is its first green bond in any format. Its green issuance is aligned with the Green Bond Principles as well as the vdp’s Green Pfandbrief minimum standards.

“By issuing green bonds, Haspa will enable investors to support its strategic ambition of providing financing dedicated to key environmental challenges in the city of Hamburg and the metropolitan area,” it said.

The inaugural green bond comes after it in February 2025 became the first German bank to issue a social senior preferred bond with its debut social bond.

“When we started with the idea of issuing ESG bonds a year and a half ago, we had a holistic approach, to look at social bonds and green bonds, too,” said Zillmann, funding and investor relations at Haspa. “With green bonds, it takes a while to collect all the data, all the EPCs, for example, and to put them in the system to that you can report on the energy efficiency and analyse it.

“Last year we made quite some progress so that we now have a green finance portfolio of more than €800m. So far, this only consists of commercial buildings – mainly multifamily housing and office buildings – but in the next phase, we also want to include private houses, then our portfolio will grow such that we can issue more green bonds.”

With the framework in place, Haspa was targeting a debut in the first quarter of this year, and was happy to see the covered bond market open strongly.

“We saw the first wave of issuance at the beginning of the year and conditions were great for issuers, with deals five, eight times oversubscribed, and spreads tightening in,” said Zillmann. “That’s when we started thinking that it could be interesting to issue sooner rather than later.

“And then – as with our debut public covered bond – we were the only German issuer on the day of launch, so we had all the attention of investors. In this respect, it was good timing.”

Haspa sold its first public sector Pfandbrief benchmark in October, a €500m long six year deal.

The bank’s green debut is also the first green benchmark covered bond of the year, with pent-up demand evident after the mandate was announced late Monday morning.

“We already had some investors telling us that they needed some green Pfandbrief for their green portfolios,” said Zillmann (pictured), “as there hadn’t been much supply in the past four months. It gave us good confidence beforehand that the deal would be successful.”

The market was meanwhile stable yesterday, after some volatility carried over from last week into Monday morning but then dissipated, he noted, with MünchenerHyp issuing a €500m seven year Pfandbrief and DekaBank a sub-benchmark.

Yesterday morning, leads Commerzbank, Crédit Agricole, Danske, DekaBank and Erste went out with guidance of the mid-swaps plus 27bp area for the €500m no-grow February 2033 green mortgage Pfandbrief, expected rating Aaa. After around an hour and a quarter, they reported books above €1.75bn, including €250m of joint lead manager interest, and after around two hours and 10 minutes, they set the spread at 20bp on the back of books above €2.1bn. The final order book was above €1.75bn, including €250m of JLM interest.

“We are very happy with the outcome,” said Zillmann. “The final order book was 3.5 times oversubscribed and mid-swaps plus 20bp is a really good level for us in absolute terms, but also a good level relative to peers.”

A banker at one of the leads put pricing flat to fair value, while another said the deal came inside fair value and offered a rare example of a greenium in covered bonds. According to pre-announcement comparables circulated by the leads, MünchenerHyp’s new seven year was at 17bp, mid, while among January supply, BayernLB April 2034s were at 20bp, Helaba January 2035s at 21bp, and NordLB February 2033s at 22bp.

“On the one hand, the green aspect supported good pricing – we had a relatively high share of investors that have a focus on ESG,” said Zillmann, “and on the other, it is a product of the journey we have had over the past one-and-a-half to two years, raising our profile in the markets, so that investors tend to perceive Haspa as a regular issuer now, which also tends to help in terms of demand.”

According to a lead manager, 45% of the paper was distributed to ESG-focused accounts. Banks were allocated 61%, funds 15%, insurance companies and pension funds 15%, government and agency accounts 9%. Germany took 63%, the Nordics 19%, Italy 6%, the Benelux 6%, Austria and Switzerland 3%, and other 3%.

Although Haspa has now established its green and social issuance – as well as public Pfandbriefe alongside mortgage Pfandbriefe – Zillmann noted that it still has the flexibility within its frameworks to issue, for example, a social public Pfandbrief or a green senior preferred.

“Of course, we will have to see how our funding plans develop in general, which will in general depend on loan growth,” he added. “What I can say is that we want to be a regular issuer and therefore will be in the market every year.”