HSH Nordbank AG placed pfandbrief bonds valued at €500 million with a fixed-rate annual coupon of 0.25%.

Pfandbrief bonds are a cheap, low-risk funding instrument backed by real estate and public debt.

Nordbank's issue is mostly secured by commercial property loans in Germany and carry a 3.5-year term.

It was priced at 14 basis points above the midmarket swap rate, with a guidance at 18 basis points above the mid-market swap rate.

The bank said the notes were significantly oversubscribed, attracting orders of up to €1.4 billion. International investors subscribed to 37% of the bond volume.

Crédit Agricole CIB, Commerzbank, Goldman Sachs International, HSH Nordbank and Natixis served as book runners on the deal.