Société Générale SFH priced only the second euro benchmark in over three weeks yesterday (Wednesday), a Eu1bn no-grow seven year deal that was timed well to take advantage of returning appetite and offered relative value versus other recent trades, said a lead syndicate banker.

Leads Banca IMI, Banco Santander, Crédit Agricole, Credit Suisse, Société Générale and UniCredit collected nearly Eu2.2bn of orders from more than 100 accounts, according to Dhiren Shah, covered bond and SSA syndicate at Credit Suisse.

The obligation de financement à l’habitat issue was priced at 33bp over mid-swaps, the tight end of guidance of the 35bp over area, which followed initial price thoughts of the mid to high 30s over. The bonds were quoted 32bp/30bp over yesterday afternoon, according to Shah.

The deal is only the second French new benchmark covered bond this year, after a Eu1bn 12 year for Caisse de Refinancement de l’Habitat on 4 January, and also only the second new issue from any jurisdiction in over three weeks after Sweden’s SEB reopened supply on Monday with a Eu1bn seven year that was priced at 15bp over.

Syndicate officials away from SG’s deal were positive about deal, and Credit Suisse’s Shah said that the execution approach was very sensible.

“Do a yard, choose a spread offering a bit of a new issue premium and allow the momentum to take the trade forward,” he said. “It was an ideal execution scenario.”

Relative value considerations based on recently priced deals were behind the pricing and take-up of SG’s deal, according to Shah, rather than the issuer’s secondary market curve being the sole pricing input.

“SEB put a level out there for the next best thing in covered bonds after German Pfandbriefe,” he said, “and investors could see that SG was offering an attractive spread versus France and other recent trades for seven year paper from a quality French bank.”

The issuer picked a good time to come to market, he added.

“Over the past three to four days sentiment changed and investors are back in buying mode after weeks of no supply,” said Shah. “For a while investors hadn’t been able to get tickets bigger than Eu5m-Eu10m in secondary, so coming with a new issue at that time was a good move.”

Germany and Austria took 41%, France 17%, the Nordics 12%, the UK and Ireland 8%, the Benelux 7%, Italy 6%, Switzerland 5%, Asia 2%, and others 2%. Asset managers were allocated 47%, banks 45%, central banks and SSAs 5%, and insurance companies and pension funds 3%.