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Landesbank Baden-Wurttemberg priced its largest ever jumbo Pfandbrief yesterday (Thursday), a Eu2bn five year public sector issue that reopened the German market and reinforced the recovery in the wider covered bond market.
Encouraged by Sparebank 1's success earlier this week and stability in the secondary market, LBBW and joint bookrunners Citigroup and UniCredit opened books at guidance of the mid-swaps flat area on Wednesday lunchtime.
Within one hour more than Eu2bn of orders had been placed, and by Wednesday's close the book stood at Eu5bn. The book was then closed ex-Asia and the guidance revised to minus 1bp. The final order book was Eu5.6bn, and Eu4.3bn was good at the tighter level.
"It was a very successful transaction and we are very pleased to have reopened the Pfandbrief market again," said Peter Kammerer, head of international funding and investor relations at LBBW in Stuttgart. "We have shown that even in these times you can bring a Eu2bn benchmark at sub-Libor levels, which was our aim."
Issuers, particularly in Germany, are understood to have been debating the merits of issuing...