Caisse de Refinancement de l’Habitat launched a Eu750m no-grow deal today (Thursday), whose six and half year maturity surprised some syndicate bankers, but which met with consistent investor demand and was priced flat to secondaries.

Leads Crédit Agricole, DZ Bank, HSBC and LBBW set initial price thoughts in the mid to high 20s over mid-swaps, guidance of 27bp plus or minus 2bp, and the re-offer at 25bp.

Syndicate bankers away from the leads said the issue came with no new issue premium considering outstanding CRH 2019 issues.

One said that the pricing sounded “a bit aggressive” in comparison to secondaries, and that CRH had been able to achieve that result as it could benefit from strong investor support, as shown by orders reaching Eu1bn before the opening of the books.

He added that the tight pricing was also due to capping the issue at Eu750m at the beginning of the process, significantly smaller than recent French trades.

Crédit Agricole Home Loan SFH priced a Eu1.25bn seven year issue at 35bp over mid-swaps last Thursday (28 February), while Société Générale SFH launched a Eu1bn seven year trade that was priced at 33bp over mid-swaps the week before that.

A syndicate banker away from the leads said that if CRH had placed a seven year deal today, it would have come at around 26bp-27bp over mid-swaps.

The choice of maturity for the trade was said by syndicate bankers to be “surprising” given the uncommon six and half year tenor, and it being so close to the recent French seven year trades. Syndicate bankers also noted that CRH usually places longer dated issues.

CRH reopened the covered bond market for the year on 4 January, when it launched a Eu1bn 12 year issue that was priced at 46bp over mid-swaps and attracted more than Eu2.5bn of orders.

CRH’s last shorter dated deals date back to two years ago, a Eu700m two year issue launched in April 2011 and a Eu400m two year issue in March 2011.

A syndicate banker away from the leads said the choice of maturity may have been due to the feeling that demand for longer tenors has decreased since the beginning of the year. Another said that CRH has so many outstanding issues that it can target any point of the maturity curve.

Syndicate bankers away from the leads said that CRH benefited from the limited covered bond supply of recent weeks and a generally supportive market characterised by a renewed injection of liquidity.