CaixaBank is today (Wednesday) pushing cédulas supply out to the five year maturity, a move that some market participants said would have been “almost impossible” a few weeks ago, with good demand uncovered by recent Spanish deals paving the way.

Leads CaixaBank, Barclays Capital, Crédit Agricole, JP Morgan and UBS initially marketed CaixaBank’s trade at the 260bp over area before revising guidance to the 250bp over area and fixing the spread at 248bp.

CaixaBank headquarters, Barcelona

The leads opened the order books at 0900 CET and closed them by 1215 with orders over Eu2.1bn, according to a syndicate official at one of the leads.

He said they were able to price the deal at such a tight spread because there was very strong demand for the trade, which he put at 10bp over Spanish Bonos.

A syndicate official away from the leads said that the initial guidance seemed fair, adding that demand from domestic accounts has allowed pricing on Spanish deals to be relatively aggressive.

In choosing to sell a five year issue, CaixaBank has pushed cédulas supply further along the curve after three year deals for Banco Santander and Banco Sabadell, the latter being followed by a long four year transaction for Banesto yesterday (Tuesday).

RBS analysts said that Santander and Sabadell deals had laid the groundwork for CaixaBank to target a five year deal, which “looked almost impossible just a few weeks ago”.

The syndicate official away from the deal said that the longer the maturity the more a Spanish benchmark will be driven by domestic demand, and said that CaixaBank’s transaction seemed to be going well.

Another syndicate banker said that CaixaBank’s transaction was “a great trade”, and that it was positive to see an issuer pushing out the Spanish curve.

He said that initial guidance of the 260bp over area struck him as slightly generous, but that the leads were pursuing the right strategy with respect to pricing given that the five year maturity bracket is untested by Spanish banks.

He was encouraged by the gentle pace of supply in the benchmark covered bond market, including the recent Spanish issuance, and said that his “only worry” is that issuers wait too long to tap the market in anticipation of further spread tightening.

While there is scope for further spread tightening in some jurisdictions, such as Italy and Spain, in others this is not the case and issuers from Germany and the Nordic area should there take advantage of the rally, he said.

Banesto (Banco Español de Crédito) yesterday priced a Eu500m no-grow issue at 235bp over mid-swaps on the back of an order book just shy of Eu2bn, via leads Banesto, Citi, Credit Agricole, Deutsche Bank and JP Morgan.

Initial guidance was set at 245bp-250bp and later revised to 235bp-240bp.

A syndicate official at one of the leads said that the order books grew quickly, with around 120 accounts participating to make for a granular take-up.

He said that the re-offer spreads on recent cédulas benchmarks provided pricing references for Banesto’s deal and that the transaction, like deals for Banco Santander and Banco Sabadell, went smoothly.

“All the recent deals have been well supported,” he said. “It’s a pleasure to be issuing at the moment.”

He said that the long four year transaction was bought by similar types of investors to those involved in preceding three year cédulas deals.

“Anything between the three to five year range attracts the same investor base,” he said.

A covered bond analyst noted that Banesto’s deal is the first double-A rated benchmark covered bond from a peripheral issuer, and said that the transaction was probably supported by improved sentiment due to recent new provisioning requirements recently approved by the Spanish government.