Société Générale SFH priced its second issue yesterday (Thursday), getting a share of demand at the long end of the curve that had manifested itself in 10 year deals for fellow French issuers CRH and Crédit Agricole on Tuesday and Wednesday, respectively.

The transaction, a 10 year obligation à l’habitat deal, was announced late on Wednesday afternoon, with leads ABN Amro, BayernLB, Crédit Agricole, SG, UBS and UniCredit skipping an IoI phase to begin official bookbuilding early yesterday morning.

“About an hour after opening books we had more than Eu1bn of orders,” said Rupert Carter, head of covered bond syndicate at Société Générale, “which is a pretty strong result given that we did not whisper the issue the day before as a lot of recent transactions have done.”

The leads kept the books open to allow more demand to be registered, including from central banks, he added, with around Eu1.5bn of orders placed by the time the leads closed the books a little after 1200 CET.

“It’s clear that liquidity is still there,” said Carter.

The issuer was in the market at the same time as its sovereign, which sold Eu7.96bn of long dated bonds at its first auction this year, a result viewed as solid given that the country’s triple-A rating is under threat. Carter said that some accounts were focussed on the government bond auction and therefore only came into SG’s order book afterwards.

The issuer priced a Eu1.25bn deal at 170bp over, the tight end of guidance of 170bp-175bp over and a 10bp and 5bp concession over the re-offer spreads paid by CRH and Crédit Agricole, respectively, on their Eu2bn and Eu1.5bn deals.

Carter said that pricing reflected where the different credits were trading.

“CRH has been the tightest of the French for a good few months now, and it’s no surprise that Crédit Agricole came wider and SG back of that,” he said. “It’s a bit difficult to assess because SG SFH only has one issue outstanding, with only obligations foncières in the long end, but secondary market levels in five years, where there are comparative data points, pointed to a relative pick-up of around 10bp over Crédit Agricole.”

With a re-offer spread of 170bp, Société Générale ended up paying 5bp over the 165bp on Crédit Agricole’s deal, slightly inside the premium in the secondary market, he added.

A syndicate official away from the leads said that a new issue premium of at least 25bp was generous, “but points out the first advantage and repricing potential CRH had for the whole French covered bond market”.

Germany and Austria were allocated 55% of the issue, France 33%, the Benelux 7%, southern Europe 4%, and others 1%. Insurance companies and pension funds took 43%, asset managers 25%, central banks and SSAs 16%, banks 10%, and corporates 6%.

Société Générale’s first obligation à l’habitat issue was a Eu1.5bn five year sold at 43bp over mid-swaps at the end of May 2011. Its other benchmark in 2011 was a Eu1bn 12 year launched off an obligations foncières programme in January.