BPCE SFH came to the market yesterday (Monday) with a Eu1.25bn five year obligations à l’habitat deal, with the issuer keen to access wholesale funding during a quiet day, ahead of its own blackout.

Jean-Philipe Berthaut, deputy CEO of BPCE SFH, head of group funding at BPCE, said the issuer had decided to come quickly to the market with a blackout looming before it, at the end of the week.

“If we didn’t come to the market now, we wouldn’t be able to issue before March,” he said. “We also realised we had this window where not a lot of other issuers were in the market.”

Leads Crédit Agricole, Danske, LBBW, Natixis and UniCredit, with BPCE, priced the deal at 120bp over mid-swaps. Berthaut said the final pricing was good, having tightened 10bp from the initial guidance of 125bp-130bp over. BPCE has recently tightened a little bit versus its French competition, according to Berthaut.

“When we started in January, investors were waiting for large amounts of issuance, but due to the LTROs (long term repo operations) from the ECB, it was not the reality and there was a lot of cash in the market waiting, whereas now, I think we have reached more equal ground.”

The issuer decided to launch a five year after focussing on longer maturities for the majority of 2011. BPCE launched a 10 year on 1 September 2011, and a tap of the 10 year on 27 October, followed by a new 10 year on 12 January. It last came to the market with a five year on 3 May 2011.

“We felt there was some demand from investors for this maturity,” added Berthault.

The outstanding May 2016 was trading at 100bp over mid ahead of the trade, and was used as a comparison for pricing, according to a syndicate official at one of the leads. The syndicate official put the new issue premium at 15bp.

Berthault noted that France took 8% of the deal, a result he said was unsurprising for a five year tenor.

“Participation from France is currently low when going in this intermediate maturity,” he said.

Germany took 43%, Spain 12%, the Nordics 10%, the Benelux 10%, the UK 9%, Italy 5%, and others 3%.

“We knew the response would be very strong from Germany, Nordics, and the UK, as well as central banks,” said the syndicate official. “Those were the main areas we were targeting.”

Berthault said participation under the ECB covered bond purchase programme had been minimal.

“We had a few orders from the ECB and Banque de France, but we allocated a limited amount due to the large oversubscription,” he said.

The order book was in excess of Eu2.1bn.

Asset managers were allocated 50%, banks 32%, central banks, sovereigns and supranationals 14%, and insurance companies and pension funds 3%.

The paper had tightened by about 5bp in the secondary market today, according to the syndicate official.