Crédit Agricole Home Loan SFH priced a Eu1.5bn 10 year obligations à l’habitat benchmark at 165bp over yesterday (Wednesday), showing the market’s capacity for French names at the long end of the curve after a Eu2bn CRH issue on Tuesday and ahead of an SG SFH deal today.

Leads Crédit Agricole, Danske Bank, Société Générale, UBS and UniCredit started taking indications of interest on Tuesday. Vincent Hoarau, head of covered bond syndicate at Crédit Agricole, said that the response was “extremely constructive”.

“We took almost half a billion in IoIs,” he said.

The books were opened on Wednesday with official guidance of the 165bp-170bp area. Hoarau said the issuer paid a new issue premium of 15bp, comparable with a Caisse de Refinancement de l’Habitat Eu2bn 10 year on Tuesday, which he said paid a 15bp new issue premium as well.

Orders totalled Eu1.8bn by the time the books were closed.

“The book looks pretty balanced between Germany and France,” said Hoarau.

Austria and Germany took 46.9%, France 38.8%, southern Europe 6%, the UK 3.3%, the Benelux 2.7%, Nordics 1.7%, and others 0.5%.

“Sixty percent of the deal went to non-domestic investors, a very good outcome from the pan-European roadshow executed at the end of last year,” he said. “The book is very granular, too, with more than 40 accounts with a ticket size at or below Eu10m.”

RBS analysts noted the strong German and Austrian demand for the paper.

“A 210bp spread over Bunds for a triple-A rated French legislation protected covered bond seemed too good to be turned down for a number of investors,” they said.

Insurance companies were allocated 48%, banks 16%, asset managers and financial institutions 15%, central banks and official institutions 13%, corporates 7%, and others 1%.

Pricing was based on the issuer’s secondary curve, according to Hoarau. Crédit Agricole has an outstanding January 2021 that was at 151bp mid before the announcement of yesterday’s deal.

“CRH’s success and this success proves French issuers are still very strong,” said Hoarau.

“I’m not sure that CRH had an effect on Crédit Agricole coming to the market,” he added, “but it was clear to everyone that CRH was the candidate to reopen the French jurisdiction and it did it extremely well with a Eu2bn print.”

He added that there was a lot of liquidity in the 10 year part of the curve.

“I would not be surprised to see more issuers tap the 10 year,” he said.

Société Générale SFH was in the market this (Thursday) morning with a 10 year at 170bp-175bp over (see separate article).