BPCE SFH priced the third French benchmark covered bond of the week shortly before an ECB Governing Council press conference today (Thursday), a Eu1bn seven year deal that met with weaker interest than the preceding French deals but was said to show depth in the French market.

The deal is the sixth benchmark issue this week, plus a tap, as issuers sought to secure funding before central bank meetings today and non-farm payrolls tomorrow (Friday) and in anticipation of heavy supply and potentially disrupting news emerging about Syria over the weekend.

On today’s deal for BPCE SFH, leads Crédit Agricole, DZ Bank, Natixis, Nomura, Santander and UBS built an order book in excess of Eu1bn and priced a Eu1bn deal at 25bp over mid-swaps.

This is in line with guidance of the 25bp over area, and initial price thoughts of the mid-20s, with a syndicate official on the deal noting that the new issue premium was smaller from the outset than was the case on the other issues this week. He said it was difficult to quantify the concession, but put it at 3bp-4bp.

“We’re very happy with the execution,” he said. “This and the other deals show there is depth in the French market.”

The leads had received considerable feedback focussing on the premium over OATs, he added, saying the 25bp over level incorporated an attractive concession of 20bp.

A syndicate banker away from the leads said BPCE’s deal looked cheap versus a deal for La Banque Postale yesterday, but less so compared with fair value of the low 20s that the issuer’s curve points to.

“It’s a bit tight so there isn’t that much oversubscription, and maybe they should have started in the high 20s, but I’m neutral,” he said. “They got the size.”

This week’s French supply is the first from the jurisdiction since a Caisse Française de Financement Local (Caffil) debut in July, with an auction of French government bonds today adding to supply from the country.

BPCE’s deal comes after La Banque Postale Home Loan SFH made its debut yesterday, with a Eu1bn seven year at 16bp over mid-swaps. Leads Citi, Commerzbank, Natixis, Société Générale and UniCredit gathered some Eu3bn of orders from 128 investors. The deal was initially marketed at the 20bp over area, which led to indications of interest exceeding Eu1.5bn, and guidance was then set at the 18bp over area. At 16bp over, the deal offered a premium of 10bp over the October 2020 OAT, according to a lead syndicate banker.

He said it traded at 14bp over yesterday afternoon. Syndicate bankers today said it was some 4bp tighter.

Germany and Austria took 32%, France 24%, the Benelux 12%, Nordics 10%, the UK and Ireland 9%, Asia 5%, Italy 2.5%, Spain and Portugal 2.5%, and others 3%.

Banks were allocated 31%, central banks 6%, funds and asset managers 51%, insurance companies and pension funds 11%, and others 1%.

A Eu1bn 10 year deal for Crédit Mutuel-CIC Home Loan SFH on Tuesday was the first French covered bond of the week. It was priced at 36bp over on the back of Eu1.5bn of orders, and was today said to be around 1bp tighter.