DZ Hyp takes Germany to 7s, tests investor price sensitivity
DZ Hyp successfully extended the German Pfandbrief curve out to seven years for the first time in 2025 with a twice-subscribed €1bn deal today, but suffered the greatest book attrition of any euro benchmark covered bond yet this year, suggesting investors’ pricing limits are being tested.
Issuers achieve size and price as investor pile-on persists
Crédit Mutuel and Argenta Spaarbank were just the latest issuers to hit the high end of size expectations without compromising on price today, after DNB yesterday sold the largest euro benchmark covered bond yet this year, while DZ Hyp is expected with further supply tomorrow.
‘Gross imbalance’ means tight levels, big books for allcomers
A €500m Arkéa Public Sector SCF seven year today took the week’s euro benchmark issuance to a respectable €9.75bn from 12 tranches and 11 issuers, as covered bond supply belatedly picked up towards traditional new year levels amid bumper demand that flattened new issue premiums.
Slim pickings but fat books as covereds feel way into 2025
Just €4.25bn of euro benchmark covered bonds hit the market in the first week of 2025, down dramatically on previous new years and even quieter than expected, but the four issuers who did test the water found strong demand for their new issues.
Pfandbrief improvement seen after exiting unsecured shade
German issuers expect demand for Pfandbriefe to pick up in the coming months and have meanwhile been enjoying the strongest demand for their unsecured debt since the Association of German Pfandbrief Banks (vdp) launched its Issuance Climate survey two years ago.
Paragon files FCA covered application amid funding shift
The UK’s Paragon Banking Group has submitted an application to the Financial Conduct Authority to issue covered bonds after having completed structuring, as it seeks to increase wholesale funding flexibility while moving away from residential mortgage-backed securities issuance.
Investors open arms to BNPP 3s, MünchenerHyp plays safe
BNP Paribas scored a second French success of the week today, attracting peak demand of some €2bn to a €500m three year covered bond and keeping its new issue premium negligible, while MünchenerHyp erred on the side of caution with a €500m follow-up to yesterday’s German supply.
CFF social 5s outshine LBBW. MünchenerHyp, BNPP due
Euro benchmark covered bond supply made a relatively strong start to the week today (Monday), with two new issues out and at least two more expected imminently, although a €500m five year social bond for CFF put a €500m four year public sector Pfandbrief for LBBW in the shade.
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Latest benchmarks and subs
| DZ Hyp | |||
| EUR1bn | 2.750% | 2032 | +37bp |
| Argenta | |||
| EUR1bn | 2.875% | 2032 | +55bp |
| CM-CIC | |||
| EUR1.50bn | 3.000% | 2032 | +63bp |
| Landesbank Berlin | |||
| EUR250m | 2.625% | 2030 | +35bp |
| DNB | |||
| EUR1.50bn | 2.625% | 2030 | +36bp |
| Click issuer for more | |||
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