BHH raises €1bn 20bp below ECB deposit rate

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By Bill Thornhill
20 Aug 2019

BerlinHyp (BHH) reopened the covered bond market after the summer break with a €1bn three year that yielded almost 20bp less than the European Central Bank’s deposit rate. The transaction could cause some issuers to reconsider their funding approach as the deal can profitably refinance liquidity borrowed under the last Targeted Longer-Term Refinancing Operation (TLTRO II).

After announcing the deal on Monday, BHH opened order books on Tuesday for a benchmark sized three year Pfandbrief with initial guidance of flat to 2bp through mid-swaps, and a view to price in that range — an approach that investors appreciated, said a lead manager.

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