Germany

Berlin Hypothekenbank is readying the market’s first Green Pfandbrief and is likely to launch the bond on Monday or Tuesday next week. Analysts expect there to be a minimal spread difference between the borrower’s green and conventional curves.

The mortgage cover pool backing Aareal Bank’s Pfandbriefe is expected to grow by roughly a fifth following its integration with the assets originated by Corealcredit, according to Commerzbank research analysts. The German exposure will rise, as will the proportion of residential loans.

Deutsche Pfandbriefbank (pbb), the German Pfandbriefe issuer that will be privatised this year, said it expects to make a first quarter profit of €45m, even after writing down 50% of its exposure to Heta Asset Resolution.

Covered bond supply surged this week with investors piling into deals that offered little new issue concession and negative spreads, leading to concern that an inflection point was at hand. However, there was no sign of investor pushback, with the tightest deals from core European issuers experiencing a high level of demand. But some bankers were left wondering just how long the superb conditions would last.

The European Commission is taking steps to encourage future deals in the new asset class. It published the findings of a report on Wednesday and recommends standardising the regulatory framework.

National Bank of Canada (NBC) priced the first 144a three year dollar benchmark since July 2013 on Monday. The lack of comparable deals meant there was an element of discovery in pricing, which was almost excessively defensive. BayernLB was set to price a three year Reg S public sector dollar benchmark.

La Banque Postale printed its first soft bullet euro covered bond, paying a 0bp-1bp new issue premium for its market return, and Helaba doubled the size of its 1.875% 2023s to €1bn with a tap on Tuesday.

Deutsche Hypo returned to covered bonds for its annual benchmark on Monday, building a heavily oversubscribed book for its €500m seven year mortgage Pfandbrief in a record 10 minutes.

Two European banks announced covered bond mandates on Monday – La Banque Postale in euros and BayernLB in dollars.

National Bank of Canada is on track to sell a $750m three year covered bond, its first covered bond in dollars since 2011.

Berlin-Hannoversche Hypothekenbank (BHH) mandated leads to market the first green pfandbrief, or Grüner Pfandbrief, setting the stage for further green covered bonds and RMBS due this year and next. In contrast to last year’s environmental and social governance deal from Münchener Hypothekenbank, the forthcoming transaction will be of benchmark size and will be backed exclusively by energy efficient buildings.

The German issuer mandated joint leads for a seven year €500m no grow mortgage backed Pfandbrief on Friday for likely issuance on Monday.