Crédit Mutuel-CIC Home Loan SFH completed its first covered bond under France’s obligations à l’habitat framework despite a nervy turn in market sentiment this week, an achievement that a lead syndicate banker said reflected investors’ high regard for the issuer.

The mandate for the transaction, a Eu1.5bn five year issue, was announced on Monday with official bookbuilding and pricing ensuing the following afternoon.

“Despite a slightly weaker market on Monday, the leads still managed to gather a large volume of IoIs in order to provide the issuer with a swift execution on Tuesday,” said Rob Gardiner, syndicate, HSBC – joint lead manager with Barclays Capital, BNP Paribas and Danske Bank.

“It was a great trade given it was closed when the market was turning, but with CM-CIC having a broad international distribution with zero Greek exposure it is clearly well thought of by the marketplace,” he added.

Due to lower than anticipated investor availability on Monday, partly on account of a public holiday in the US, the leads officially opened the order books a day later than had been their initial preference.

“But based on investor feedback and our view that the market would be OK the next day we felt confident to print on Tuesday,” said Gardiner.

The leads on Monday afternoon gathered indications of interest on the basis of initial price thoughts of the high 50s, which generated good momentum, according to Gardiner.

On Tuesday the leads officially opened the order books, with guidance set at the 58bp over mid-swaps area, and gathered around Eu1.7bn of orders from 62 accounts. The re-offer spread was fixed at 58bp over.

“That we were able to print a Eu1.5bn deal off Eu1.7bn of orders shows just how high quality an order book it was,” said Gardiner.

Initial price thoughts were formed on the basis of secondary market levels for other bonds from France’s new Société de Financement de l’Habitat (SFH) issuers, with Société Générale’s the tightest of all such issues with a five maturity and a Eu2bn five year deal from BPCE SFH trading at around 58bp over, 5bp tighter than its re-offer spread of 63bp over, according to Gardiner.

“CM-CIC historically trades inside BPCE and, with the market having substantially deteriorated since BPCE’s deal, to print inside the initial re-offer of 63bp highlights the strength of the name,” he said.

Banks and financial institutions were allocated 75% of the paper, investment managers 15%, central banks and official institutions 8%, and others 2%. The Nordics took 20%, Germany and Austria 20%, the UK 17%, France 15%, Asia 10%, Italy 8%, the Benelux 8%, and others 2%.