Aareal hits sterling sweet spot with first Sonia Pfandbrief

sterling demand
By Bill Thornhill
22 Apr 2021

Aareal Bank managed to attract healthy demand for its first Sonia covered bond, enabling it to price the deal in line with fair value, in a large size, with negligible price sensitivity and a high quality order book.

The German Pfandbrief issuer opened books on Thursday, after mandating Deutsche Bank, HSBC, NatWest Markets and Nomura on Wednesday for an April 2025.

Initial price guidance was set at 34bp area over Sonia and, by midday, when demand stood at £575m, the spread was set at 31bp.

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