Credit Suisse launched its second dollar covered bond this (Thursday) morning, a three year benchmark that a syndicate official at one of the leads said was benefitting from an execution strategy focussed on letting US investors drive the transaction.

Leads Credit Suisse, Bank of America Merrill Lynch, RBC and SG announced the deal yesterday (Wednesday) afternoon New York time, according to the syndicate official. The initial price whisper was 115bp over mid-swaps, but books were opened with official guidance of the 110bp over area at 0745 London time today.

“This deal is flying,” said the syndicate official. “We changed our strategy from our last deal to make it fair.

“Last time our rationale was to open in Europe and Asia, and then go into the US, whereas this time, because covered bond spreads have tightened massively, we let the US drive it.”

Credit Suisse sold its first dollar covered bond, a $1bn five year issue priced at 96bp over US Treasuries, in May last year. Today’s deal is the fifth new US dollar benchmark covered bond this year, and comes after Caisse Central Desjardins du Québec on Tuesday sold a $1.5bn five year issue at 51bp over mid-swaps.

“Our strategy has worked, with an order book now in excess of $4bn,” he said, adding that the book had a good mix of investors, with one or two central banks in the deal, and good real money accounts from the US and Europe.

He said the leads were going to make a decision as to how to proceed with the trade, whether to keep books open or close them, or refine guidance, when markets opened in the US.

The market has been conducive to Credit Suisse’s trade, he said.

“I’m just surprised at how much we were able to get,” he added.

A syndicate official away from the leads said the trade was going well, with the pricing in line with euro levels.

“I expect a bit of tightening in the secondary market,” he said.

Pricing was based on a UBS January 2015 issue, which was at around 108bp on the bid side, according to the lead syndicate official. The deal was launched at 168.5bp over Treasuries on 19 January, with the mid-swap spread at 135bp over.

“We thought we should price a couple basis points back of where UBS trades,” he said.

Credit Suisse had a May 2016 issue at 109bp on the bid side.

“This bond should be in the high 90s to 100bp theoretically,” said the banker. “Therefore we are adding a small new issue premium of about 10bp.”