CaixaBank placed an almost three times oversubscribed Eu1bn five year deal yesterday (Tuesday) after having waited longer than other Spanish issuers to come back to the cédulas market, seeking better spread levels, according to an official at the issuer.

Leads BNP Paribas, CaixaBank, Citi, Deutsche Bank and Société Générale priced the deal at 210bp over mid-swaps, tightening the spread from initial price thoughts of the 220bp area and guidance of the 215bp area.

An official at the issuer told The Covered Bond Report that at 210bp over the deal was priced almost flat to secondaries and 42bp inside the Spanish government bond curve.

The official noted that CaixaBank’s covered bonds are rated higher than the Spanish sovereign, which is rated BBB+ by Standard & Poor’s and Baa3 by Moody’s.

“Thanks to the quality of our portfolio and overcollateralisation levels, our cédulas are rated AA- by S&P and A3 by Moody’s, benefiting from notches of uplift over our senior debt rating,” he said.

CaixaBank’s Eu1bn deal attracted Eu2.7bn of orders, with a strong presence of international accounts, and Spanish investors being allocated only 21%, said the official.

“The order book was well diversified, with some very good quality accounts,” he said.

Tim Michael, FIG syndicate at Citi, said that the total order book of Eu2.7bn included only a small number of orders that were limited when the leads revised guidance to 210bp-215bp over.

The issuer’s secondary market spreads and trading levels for BBVA December 2017s and Santander January 2018s provided the main pricing input, according to Michael – CaixaBank’s interpolated curve put fair value at around 205bp, he said, with 210bp over therefore incorporating a 5bp new issue concession and around a 10bp premium versus BBVA and Santander.

“The market is in good shape,” he said. “People are willing to look at the right names at the right spreads and I think we provided both.”

The CaixaBank official said that before the deal the issuer had engaged in a lot of investor work, and the feedback received pointed in the direction of strong investor demand for covered bonds issued under CaixaBank’s name.

CaixaBank was one of the few Spanish issuers not to tap the covered bond market at the beginning of the year, when a new window of opportunity opened up for Spain’s lenders after a year of challenging market conditions.

“We are always looking at the market but we are not in a rush to issue because we are in a comfortable liquidity position,” said the official. “At the beginning of the year market conditions did not fit in with our spread targets as much as we wanted.

“We tapped the covered bond market yesterday as we were confident that we could achieve a result more in line with our targets,” said the CaixaBank official.

He added that in January CaixaBank opted to place a Eu1bn three year senior unsecured issue that was priced at 285bp over mid-swaps and attracted more than Eu5bn of orders.

The new cédulas deal marks the return of the issuer to the covered bond market after more than a year’s absence.

Germany and Austria took 24%, Spain 21%, France 18%, the UK and Ireland 17%, Switzerland 8%, the Benelux 4%, Nordics 2%, Portugal 1%, the Middle East 2%, Italy 1%, and others 1%.

Asset managers were allocated 56%, banks 25%, insurance companies 15%, central banks 2%, and private banks 1%.