Berlin Hyp shows covered bond issuance has got tougher

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By Bill Thornhill
10 Feb 2020

Berlin Hyp was unable to tighten pricing as much as it wanted for its seven year Pfandbrief on Monday, showing that a steep fall in yields this year is having a direct impact on the primary market. The transaction provided a clear warning to issuers who believe they should be able to price deals flat to their outstanding curves.

Demand for Berlin Hyp’s €500m Pfandbrief issued on Monday was good enough, but the order book was slow to build.

The issuer was unable to tighten pricing as much as it wanted and it was also obliged to pay a new issue premium.

“Asset managers are placing smaller orders ...

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