Compagnie de Financement Foncier came to the market this (Friday) morning with a Eu2bn 3.5 year issue that bankers away from the leads said came with initial guidance that was unnecessarily wide. Speculation about a next Spanish issuer was also emerging.

Leads Citi, Natixis, LBBW, Nomura and RBS revised guidance to 95bp-100bp over from initial guidance of 105bp-110bp, before fixing the final spread at 95bp over.

“My guess would have been that CFF would have gone out at 100bp over,” said a syndicate official. “I was very surprised to see a wider starting level.”

Another also said the initial pricing was a bit cheap.

“I would have put the initial guidance at 100bp over,” he said. “I’m not sure where they got this 105bp-110bp level.

“The way the market was today I think they could have been more aggressive, ended up with 90bp over, and saved themselves 5bp.”

A syndicate official at one of the leads said the trade had been priced with reference to a CFF January 2016 trading at 99bp/90bp and a CFF April 2015 at 85bp/77bp. He said the trade was a “screamer”, with its Eu7bn order book.

Orders came from around 275 accounts, according to the syndicate official.

“It’s a great result,” said a syndicate official away from the leads, “but I think a big function of that is that they got the wrong price.”

Another banker away from the leads said that as soon as he saw the trade on screens, he thought it would move quickly.

“With LTROs, we don’t have any short covereds anymore,” he said, “so even given that it’s a Friday and it’s a bit punchy to try and push a deal through with the Greece situation, I thought it would go well.”

Greece presented a package of austerity measures to euro-zone finance ministers in exchange for its bailout package, but the ministers have rejected the package as incomplete.

Westpac sold a Eu1.75bn three and a half year issue yesterday (Thursday) on the back of a Eu4bn book. Leads Barclays Capital, Citi, Deutsche Bank and Westpac started taking indications of interest at 75bp-80bp over mid-swaps before officially opening books at the 75bp over area and pricing the trade at 72bp over.

“There’s not much reference out there for setting initial guidance,” said a syndicate official at one of the leads, who had used as comparables outstanding January 2017s issued by NAB and CBA, which he said were trading at around 74bp over mid.

“The deal was fantastic, with bookbuilding going very quickly,” said the syndicate official. “We announced the deal the day before (Wednesday), but did not start taking IoIs.

“We got a lot of positive feedback at that time,” he said, noting that investors had the latest update on the issuer’s credit because of a roadshow the previous week.

At 0930 CET on Thursday morning the leads started taking IoIs and by 1045 CET, when the books were officially opened, orders were already at Eu2bn.

Germany and Austria took 33.5%, France 8%, Scandinavia 11%, the UK 20%, Asia 4.5%, Australia 4%, and the Benelux 5.5%.

A syndicate banker suggested Bankia could be the next Spanish issuer to launch a deal, but noted the bank would have to put a premium on top of the Spanish trades that have come to the market this week.

“Bankia is a special case,” he said.

The Spanish bank had its cédulas hipotecarias cut from Aa2 to A1 and its public sector covered bonds lowered from A1 to A2 by Moody’s on Wednesday.

“I wouldn’t be surprised if Bankia came because the market is ripe for new issues, and they’ve just released their results today,” said a banker.