Crédit Mutuel-CIC Home Loan SFH attracted more than $3bn of orders for its first dollar covered bond yesterday (Thursday), a $1bn (Eu784m) five year issue that was the first French US dollar benchmark in more than 18 months.

Leads Barclays, BNP Paribas, Citi, Goldman Sachs and JP Morgan priced the transaction at 83bp over mid-swaps.

“We had a very, very strong reception,” said a banker at one of the leads. “There were some very decent lead tickets and then demand came in incredibly quickly.

“Unfortunately the issuer couldn’t grow the deal beyond $1bn,” he added, “so it was a little bit of an allocation nightmare.”

The leads had gone out with an initial price whisper of 85bp-90bp over mid-swaps, then tightened this to 85bp plus or minus 3bp, before arriving at the final 83bp spread.

“Given the size of the book an outcome of 82bp was fairly comfortable,” said the banker.

Comparables that were cited included BNP Paribas 2015s at a z-spread of 58bp bid, UBS March 2017s at z plus 63bp bid, and Barclays May 2017s at z plus 61bp bid.

“Given the regional bias, BNP Paribas is probably the best comparable and a new deal would probably come at 65bp, so 20bp for the extension from three to five years gives a relatively generous curve,” said the banker.

The pricing of 83bp over mid-swaps was equivalent to 74bp over Treasuries.

The deal was the first French issue since April 2011.

“Overall it was an overwhelming success,” said the banker, “which opens up the market for French names going forward. Obviously there are a lot of ducks that need to be aligned, but this should provide a very good reference point.”

He said that the deal will be free to trade at New York open today (Friday), but that, given the strength of demand, he would expect the issue to perform strongly.

The French issue came a day after SpareBank 1 Boligkreditt sold a $1bn seven year Norwegian covered bond and takes dollar supply this year to over $39bn.

A syndicate official away from the deal said that on an all-in basis there is no longer any funding advantage to be gained in dollars versus euros, with Crédit Mutuel-CIC’s deal having come at an equivalent all-in level to where it could have funded in euros.