Credit Suisse extended its covered bond curve with a Eu1.25bn seven year issue yesterday (Tuesday), increasing the size of the deal from a targeted Eu1bn after having eschewed a more defensive maturity, according to a banker at one of the leads.

The deal is Credit Suisse’s second euro benchmark covered bond, with the issuer also having tapped the US dollar market this year. The dollar trade and the bank’s inaugural euro issue, sold in December 2010, had five year maturities.

Richard Kemmish, head of covered bond origination at Credit Suisse, said that launching a trade on Friday would have been a possibility but the release of US non-farm payrolls that day would have added an unnecessary element of risk.

“After the positive sentiment following Nationwide’s trade and the covered bond purchase programme announcement, when this week opened we felt there was some good momentum,” he said. “As Credit Suisse is a high quality name, like DnB Nor, there is no need to rush, and we are quite pleased with the timing.”

Norway’s DnB Nor Boligkreditt was also in the market yesterday, selling a Eu2bn five year at 58bp over (see separate story).

Leads ABN Amro, BayernLB, BBVA, Credit Suisse, Natixis and UniCredit priced the Swiss issuer’s deal at 62bp over mid-swaps, following guidance of the low 60s over, on the back of an order book understood to have been Eu1.35bn, with 95 investors participating.

Dhiren Shah, covered bond and SSA syndicate, Credit Suisse, said that the quality of the order book, which was “extremely well placed”, gave the leads confidence to size a Eu1.25bn deal, more than the Eu1bn initially targeted.

“The order book included some accounts that we hadn’t seen in covered bonds for a while, and we already had some inquiries in the secondary market after going free to trade,” he added.

A re-offer spread of 62bp over incorporated a new issue premium of around 10bp, according to Shah.

He said a December 2015 Credit Suisse issue was quoted at the mid around 25bp-26bp yesterday morning, with the new issue premium coming on top of an additional spread reflecting the move down the yield curve, which between three and five years amounted roughly to 10bp-12bp and between five and seven to 10bp-15bp.

“The curve for five to seven years is actually quite steep” he said, adding that that was why seven years was not the “most obvious” maturity to tap for most issuers.

“But we were comfortable that we would garner enough interest for a Eu1bn benchmark,” he said. “The more defensive option of a three year or five year was not one that we deemed necessary to pursue.

“It was a very successful trade, and the fact that we were able to upsize was fantastic.”

Germany and Austria took the largest share of the bonds, with 42%, followed by the Nordic area with 25%, Switzerland 8%, France 7%, the Benelux 4%, Asia 4%, Italy 3%, the UK 3%, the Middle East 2%, and others 2%.

Asset managers were allocated 34%, banks (including retail) 32%, central banks 23%, and insurance companies and pension funds 11%.