Crédit Agricole Home Loan SFH sold a Eu1.25bn five year issue on Wednesday and officials at the French bank told The Covered Bond Report that while market conditions might have made execution challenging, demand remained satisfying.

Leads Barclays Capital, Bayerische Landesbank, Deutsche Bank and DZ Bank closed books at 1400 with around Eu1.5bn in orders and more than 60 accounts participating. The pricing was fixed at 78bp over mid-swaps after initial price thoughts of the mid to high 70s.

“The deal went very well in a difficult environment,” said Vincent Hoarau, syndicate official at Crédit Agricole. “We continued to see some pressure on some specific covered bond issuers during the execution and competing supply.”

Royal Bank of Scotland and Sparebank 1 Boligkreditt were in the market at the same time as Crédit Agricole, adding further supply to Eu5.75bn already printed on Tuesday.

“After CRH reopened the French covered bond segment on Tuesday,” said Hoarau, “Crédit Agricole demonstrated the day after its ability to seize an issuance window and to place with success the right trade in a busy and still very challenging environment.

“The deal could be upsized to Eu1.25bn on the back of high quality orders, which were difficult to cut down, while the new issue premium was rather limited.”

Hoarau added that the issuer’s outstanding January 2016 was 69bp over on the bid side, implying a new issue premium of 9bp. In the aftermarket the deal was quoted as 78bp/73bp, he added.

Nadine Fedon, CEO of Crédit Agricole Home Loan SFH, told The Covered Bond Report that after identifying that a five year maturity would be the most advantageous, the issuer decided on Tuesday to access the window.

“The market has been closed for a while,” she said, “so when there is a window to issue, you’d better issue.”

Fedon emphasised that the issuer paid a new issue premium of less than 10bp over the secondary curve.

She said high volatility in French bank share prices in August had affected the perception of the French segment, as well as the pricing French banks could command on their covered bonds, but not investor demand.

“It affected the pricing in that covered bond spreads have increased a lot over the summer,” she said, “but demand was high.

“You never like to pay a high spread,” she added, “but you have to pay the market price if you want to sell your deal.”

While Fedon said it was hard to compare the execution of the deal with Crédit Agricole’s other outstanding issues because it had not launched a five year recently, Fedon did note there was more central bank/agency and Asian participation than in previous deals. Asia took 12% and central banks/agencies took the largest share by investor type, with 24%.

Fedon was also particularly pleased to have had high participation from central banks/agencies.

“You have to keep in mind that last year we benefitted from the buying programme out of the ECB,” she said. “We don’t get that support anymore, so it’s a good sign that central banks were 24% in this transaction.

“I was also very pleased with the participation of UK-based investors,” she added. “It is good to see that our marketing effort in London earlier this year has paid off.”