German bank MünchenerHyp has issued its first mortgage Pfandbrief of the year, raising €500 million.
The covered bond has a coupon of 0.625 percent for a ten-year term. The bank said that the order book was closed after orders for €650 million were received.
“Conditions were slightly difficult following the long weekend. However, this situation was more than offset by the high demand currently noted for covered bonds and Pfandbriefe. This was also reflected by the price, which was initially announced as 10 basis points below the mid-swap rate and subsequently re-set at 12 basis points below the mid-swap rate in light of heavy investor interest,” the bank said in a statement.
In total, 34 orders were received from investors in nine countries with Germany accounting for over 80 percent of the volume sold followed by countries in Asia and the Middle-East. Central banks bought almost 44 percent of the volume placed and represented the biggest group of investors.
“The small supply of Pfandbriefe seen in recent weeks formed the basis for an excellently priced issue,” said Louis Hagen, the Chairman of Münchener Hypothekenbank’s board of management.
In April, pbb Deutsche Pfandbriefbank has issued a US dollar-denominated mortgage Pfandbrief, with a total volume placed of $600 million.
The covered bond has a term of three years and carries an annual coupon of 2.25 percent. Pbb pays a premium of 55 basis points above the current reference swaps rate. The bank said that, based on a re-offer price of 99.827 percent, the bond has a 2.31 percent yield.