Caisse de Refinancement de l’Habitat was in the market today (Wednesday), despite a difficult backdrop, with a tap of a January 2022 bond at guidance of the 150bp area that is only the second euro-zone issuance since the second covered bond purchase programme began.

Leads Barclays Capital, BNP Paribas, Crédit Agricole, Natixis and Société Générale were due to close the order books at 1200 London time after building a book in excess of Eu800m. Guidance was unchanged at 150bp over when The Covered Bond Report went to press, with pricing scheduled for this afternoon.

Syndicate officials away from the leads welcomed the transaction, but remained focussed on early next year as the timing for a broader resumption of primary market activity.

“It’s good to see a covered bond in a difficult market,” said one, “but I don’t expect any other projects until January.”

Another syndicate official away from the leads said the transaction had gone well, adding that it showed people were being “a little bit too bearish”.

“It probably means there is enough money to get things kick started in January,” he said.

Another banker said the transaction would be the last for the year.

Another syndicate official said that the transaction was successful by virtue of the demand it attracted, but said appetite in the broader covered bond market was limited, with insurance companies, particularly French ones, the most cash-rich.

“It’s domestic bonds for domestic investors,” he said of the tap, noting that it comes on the back of two taps for Cades, one yesterday (Tuesday) and another today. An increase of a 2023 Cades bond is being marketed at 30bp over the interpolated French government bond curve today, he said.

CRH’s tap is eligible for the Eurosystem’s second covered bond purchase programme (CBPP2), which set a maximum residual maturity of 10.5 years as one of the eligibility criteria.

A syndicate banker away from the leads said that with buying under CBPP2 so far skewed to the secondary market, the CRH tap gives the Eurosystem “another chance to adjust the statistics”.

The only other euro-zone issuance to have hit the market since CBPP2 began was Eu1bn on 9 November from Crédit Mutuel Arkéa, split into Eu250m and Eu750m taps of 2015 and 2021 benchmarks, respectively. The April 2021 issue was priced at 125bp over mid-swaps.

The syndicate banker noted that only two other non-peripheral covered bond issuers – Abbey and RBS – have priced a covered bond at 150bp over mid-swaps or wider.