Caisse de Refinancement de l’Habitat (CRH) reopened the market today (Thursday) after a week with no sizeable covered bonds with a Eu1bn September 2022 tap after the Greek parliament approved new austerity measures yesterday afternoon.

Greek Relief

Greek prime minister George Papandreou won support for a Eu28bn package of tax increases and spending cuts yesterday (Wednesday) that was seen as crucial for a level of stability to return to the markets.

CRH leads Barclays, BNP Paribas, HSBC and Natixis closed books on the increase at 1000 London time with orders of more than Eu1bn. Pricing was in line with initial guidance of the 65bp area.

The large increase was to an outstanding Eu1bn issue.

“We doubled the deal, which is pretty good for a Thursday after all the madness,” said the syndicate official. “The market has been pretty quiet for a while and clearly there was a build-up of liquidity.

“We priced it in the context of the secondary market,” he added. “There was good demand at the long end of the curve.”

A syndicate official away from the leads agreed it was a good sized tap.

“People are looking for duration,” he said. “They want to go long long.

“This September 2022 was a super idea. I love it.”

Another syndicate official said that more supply could follow on the back of CRH’s reopening.

“It could open the door for some other issuers because the more deals we get done from core regions, the more likely it is that peripherals will be able to come,” he said. “We could potentially see something important tomorrow, and if the recovery proves to be sustainable, we’re going to have a couple of very busy days next week.”

The last benchmark covered bond was a Eu500m five year mortgage Pfandbrief for ING-DiBa, which was priced at 14bp over mid-swaps last Wednesday (22 June).