Credit Suisse launched a Eu1.25 five year covered bond yesterday (Wednesday) and an official at the Swiss bank told The Covered Bond Report that it was mindful of the market’s deterioration in 2011 when deciding to issue.

Rolf Enderli

Leads Commerzbank, Crédit Agricole, Credit Suisse, Danske, ING and NordLB started collecting indications of interest on Tuesday ahead of launching the deal. The books were closed at 1130 yesterday with orders slightly below Eu1.5bn and comprising 90 different accounts.

Dhiren Shah, covered bond and SSA syndicate, Credit Suisse, said the deal was a “fantastic result”.

Rolf Enderli, group treasurer of Credit Suisse, said the deal had gone as expected.

“We wanted to get a better spread compared to others,” he said, “and we managed to do that by 1bp.”

UBS came to the market last Wednesday with a Eu1.5bn five year at 61bp, which was trading at 60bp mid when Credit Suisse approached the market.

Credit Suisse chose the five year maturity because it fit into its curve with two outstanding bonds, an October 2018 and a June 2016.

“We wanted to spread out the maturity,” said Enderli.

He said the issuer had chosen to access the market yesterday because of how the market had developed in 2011.

“Last year, very good issuers could only issue for the first three months and then the market disappeared,” he said, “so it makes sense to access the markets while they’re open.”

He added that Credit Suisse had very low wholesale funding needs compared with other banks.

Enderli said the pricing was fine, although “compared with historical levels, it’s still quite expensive”.

Shah said the bond was performing well in the secondary market, being 1bp-2bp tighter.

Germany and Austria took 56%, the Nordics 17%, France 6%, the Benelux 5%, the UK 5%, Asia 4%, Switzerland 3%, central and eastern Europe 3%, and other 1%. Retail were allocated 29%, banks 20%, asset managers 18%, insurance companies and pension funds 17%, central banks/official institutions 14%, and corporates 2%.