CaixaBank bought back Eu2.1bn of cédulas across four floating rate notes after it met with high interest from retail investors it had offered an opportunity to switch out of the covered bonds into fixed rate deposits, with analysts considering the results positive.

The Spanish bank had offered to buy back at par four cédulas hipotecarias maturing between June 2016 and September 2017 that were issued in 2006 and 2007 for a combined Eu4.5bn. The bank had previously bought back more than half of the outstandings in a 2009 exercise and the recent exchange offer targeted the approximately Eu2.11bn balance.

Some Eu38m of cédulas remain outstanding across the four notes following the buy-back, according to a statement from the issuer.

The take-up rates on the exchange offer ranged from 97.83% to 98.45%.

Florian Eichert, senior covered bond analyst at Crédit Agricole, noted that the buy-back at par was conditional upon customers taking out a fixed term deposit for the same amount, which allows CaixaBank to free up mortgage collateral by cancelling the cédulas, while keeping the proceeds in-house.

“Leaving all else unchanged and looking at Q2 pool data from Moody’s,” he said, “total OC should move up by 6.5% to 84% while eligible OC goes up 4.7% to 33.5%.”

Bernd Volk, head of covered bond research at Deutsche Bank, said that the offer seemed compelling, but that the high acceptance rate suggests confidence in retail deposits, which is a positive signal for deposit funding.

Three of the FRNs targeted by the exchange offer pay three month Euribor plus 10bp and the other three month Euribor flat. Retail customers were offered a four year fixed rate deposit paying 1% in the first year, 1.25% in the second, 2% in the third, and 3.75% in the fourth. The deposit may not be cancelled in the first year.