Germany

Depfa Deutsche Pfandbriefbank has opened books on a five year benchmark sized Pfandbrief, with the public sector lender finding conditions more appropriate for issuance through its German arm than its Irish ACS unit.

Landesbank Baden-Württemberg has priced only the second sub-Libor deal to hit the primary market this year. The Eu1.5bn five and a half year public sector covered bond was re-offered at 1bp below mid-swaps yesterday (Wednesday) afternoon, buoyed by high redemptions of Pfandbriefe that contributed towards an order book of more than Eu5bn.

Landesbank Baden-Württemberg launched a Eu1.5bn five and a half year public sector covered bond this morning that will be priced at 1bp through mid-swaps later today – the same level at which the German bank priced a Eu2bn five year deal in late September.

Sparkasse KölnBonn priced its non-jumbo covered bond yesterday afternoon, while in the non-covered bond jumbo market Land Niedersachsen mandated a Eu1.25bn 10 year issue this morning. The jumbo covered bond market, however, remains dead.

Depfa is reacting to the volatile market conditions by reducing the minimum size for its euro benchmarks this year from Eu2bn to the usual minimum jumbo standard, typically Eu1bn. The bank is also likely to continue its focus on the private placement market for issuance in 2008.

Sparkasse KölnBonn opened books for a Eu500m three year mortgage Pfandbrief issue that features market-making at 2bp over mid-swaps this morning. A syndicate official at leads Barclays Capital, Deutsche Bank and WestLB said that the order book was developing very well.

EFG Eurobank, the third largest bank in Greece, is poised to be among the first to take advantage of the new Greek covered bonds legislation. It plans to meet its wholesale funding target of approximately Eu4bn this year through a debut covered bond alongside two ABS issues.

Landesbank Berlin’s Eu1bn three year public sector Pfandbrief issue was performing well in the aftermarket today, after having come at the tightest level of any jumbo so far this year. Meanwhile the bank was also pleased to report the success and pricing level of the first German structured covered bond.

Around Eu3.5bn of orders within one hour for Landesbank Berlin’s three year jumbo public sector Pfandbrief this morning allowed the bank to achieve pricing at the tight end of its mid-swaps flat to minus 1bp range, making it the first benchmark covered bond to be priced inside Libor this year.

After the success of Landesbank Berlin’s public sector Pfandbrief issue this morning, other issuers are eyeing the primary market, hoping that the jumbo will not prove a one-off. However, LBB’s deal could be the exception rather than the rule, if some investors are to be believed.

DnB Nor Boligkreditt will soon be joining the throng of international issuers touting registered covered bonds to German investors. However, the Norwegian issuer is already enjoying an embarrassment of riches in the private placement market after selling its Eu2bn five year benchmark in mid-January.

Deutsche Apotheker und Ärztebank eG has confirmed its intention to enter the jumbo covered bond market, although its debut is still some way off, according to the bank. Initial expectations that the bank would issue in the second quarter may be frustrated.