Credito Emiliano debuted in the covered bond market with an accelerated Eu500m three year obbligazioni bancarie garantite issue yesterday (Wednesday) afternoon that was launched in the wake of transactions for UniCredit and Italian agency Cassa Depositi e Prestiti.

The Italian bank roadshowed its new mortgage backed OBG programme at the end of last year and had recently updated investors ahead of a potential new issue, and leads Barclays Capital, BNP Paribas, HSBC, RBS and Société Générale yesterday started working towards a new issue that was set to be launched by the end of this week, according to a syndicate official at one of the leads.

“They were just waiting for the right market,” he said, “and with the UniCredit going ahead and the CDP deal, it was felt that it was the right backdrop for announcing a deal – although not necessarily with the intention of doing it intra-day. But the response was so positive so quickly that we went ahead.”

Books were open for just half an hour.

“The books were almost twice oversubscribed,” said a banker at another of the leads. “As soon as we opened we announced that we’d be closing in 30 minutes because we had already identified a lot of interest.”

After taking indications of interest in the 140bp-145bp range, the leads opened the books with the spread fixed at 140bp over and priced the issue after quickly taking orders of almost Eu1bn. The size was capped at Eu500m from the outset.

The spread of 140bp over was equivalent to around 45bp over BTPs, said the syndicate official. He said that the government spread being a key consideration for many accounts was another reason why they were keen to proceed quickly rather than leaving the deal until today and subject to market movements.

International distribution was 45%, compared with 55% sold into Italy. The syndicate official said that this was a good achievement for a smaller, less well known Italian bank that has not been very active in international markets, and also for a Eu500m deal.

“It is a very strong credit,” he said, “very well perceived domestically and with what is considered a fantastic loan portfolio. But it is quite a small name and it has been very well funded, and so not too well known outside Italy.”

Alongside Italy’s 55%, Germany and Austria were allocated 18%, the UK/Ireland 13%, the Nordics 6%, France 5%, and others 3%. Funds took 38%, banks 37%, insurance companies 14%, agencies 10%, and others 1%.