A Eu500m obbligazione bancaria garantita for Banca Carige proved popular today (Thursday), attracting Eu1.2bn of orders, while Swedbank Hypotek showed the pull of Nordic names with a Eu1.5bn benchmark that defied some market participants’ pricing expectations.

Banca Carige went out with guidance of the 165bp over mid-swaps area for the four year transaction, which was slated as a Eu500m deal from the outset. This was the level at which a Eu350m increase to a November 2015 Banca Popolare di Milano issue was priced yesterday (Wednesday) afternoon.

Leads Barclays Capital, Intesa Sanpaolo, LBBW, Natixis and Royal Bank of Scotland are pricing the transaction at the tight end of guidance, 163bp over, after building the Eu1.2bn order book.

“It’s gone very well,” said a syndicate official away from the leads. “They set it at 163bp, slightly tighter than the 165bp area guidance, which was perhaps a nod to the BPM pricing.

“Apparently they already had Eu450m of indications of interest yesterday.”

BPM’s tap was initially slated as being Eu250m at 165bp-170bp, with Eu350m having been the maximum it could raise. The increase is to a Eu750m deal it launched in October.

Leads Banca Akros, SG and UBS built a book of Eu520m, comprising 40 accounts.

“We had 43% Italy, and then a nice split away from that,” said a syndicate official at one of the leads.

While Italy was allocated 43%, Germany took 17%, France 14%, Nordics 14%, Luxembourg 6%, Iberia 3%, and others 3%. Banks were allocated 42%, fund managers 29%, insurance companies/pension funds 25%, and agencies 4%

Swedbank shines

Swedbank Hypotek is pricing a Eu1.5bn long three year issue, after leads Credit Suisse, Danske, LBBW, Natixis and UniCredit built a book of around Eu2bn this morning. Price guidance was the 30bp over mid-swaps area and the paper is being re-offered at 30bp.

“It’s going extremely well,” said a syndicate official at one of the leads. “It’s a good issuer and I wouldn’t say that’s it’s a no-brainer, but obviously it’s at the short end of the curve where not a lot of issuers are coming and, being a Nordic name, it’s got a lot of traction with investors.”

Bankers away from the deal were impressed by the execution.

“I priced it too wide,” admitted one, “and I was wrong. A fantastic trade, I have to say.

“It went better than their last deal, which was a bit of a struggle.”

The transaction came after Danske Bank yesterday priced the first issue to be backed by a new, combined (C) cover pool, a Eu1bn five year benchmark priced by Barclays Capital, Commerzbank, Credit Suisse, Danske and Natixis at 52bp over mid-swaps. This came on the back of an order book of Eu1.6bn on the basis of price guidance of the low 50s, which itself came after around Eu1bn of indications of interest were placed on Tuesday when early talk of the low to mid-50s was released.

“We were therefore quite confident that we would achieve our target, the maximum Eu1bn issue size for the issue,” said a Danske syndicate official. “The books were therefore open for only two hours.

“The issuer decided to print at 52bp,” he added, “to allow the transaction to perform in the secondary market.”

The pricing for the C cover pool issue, backed by a mix of Swedish commercial and residential mortgages, was put at around 10bp wide of where Danske’s purely residential mortgage backed I cover pool issuance was trading. The Danske official concurred.

“The main reference for us was Danske Bank’s cover pool I,” he said. “If we were in today’s market to do a five year I pool transaction, we would have put this in the low 40s.

“The extra 10bp we offered on this transaction was to give some kind of general new issue premium, but also in part because of the mixed nature of the pool.”

He said that a lack of other cover pools, apart from some in Germany, comprising commercial and residential assets meant that there was little guidance on what the correct differential should be, but that the success of the trade suggested 10bp was right.

“The investor response to this has been strong,” he said. “In certain quarters, as you can see from the 60% German/Austrian participation, the investor base obviously knows this type of exposure very well.

“And the investor base is particularly keen on Nordic exposure. The commercial part of the pool is obviously something that investors need to get comfortable and there could be more demand coming from other quarters as well once they get more comfortable with the cover pool and how it’s made up.”

Alongside the German/Austrian 60% allocation, the Benelux took 12%, Nordics 9%, France 9%, Asia 5%, the UK 2%, and others 3%. Banks were allocated 41%, asset managers 26%, central banks 16%, insurance companies 12%, pension funds 3%, and others 2%.