Italy’s Intesa Sanpaolo is out with a five year benchmark covered bond today (Thursday), the second time that it has launched a new issue during a major industry gathering, and due to spread sensitivity will price a Eu750m deal rather than the Eu1bn that was initially marketed.

Leads Banca IMI, BNP Paribas, Commerzbank, ING and RBS set initial price thoughts at 90bp-95bp over mid-swaps for the obbligazioni bancarie garantite (OBG) issue, which is expected to be rated A2 by Moody’s. The spread was then tightened to 90bp-93bp for official guidance, with the order books in excess of Eu800m by this stage.

The deal will be priced at the tight end of guidance, 90bp over, but the issuer will size the deal at Eu750m rather than the Eu1bn that was marketed at the outset. This is due to spread sensitivity in the order book, according to a syndicate banker at one of the leads.

Today’s deal comes as many market participants are in Barcelona for the second day of an annual industry gathering, the second time Intesa has chosen such timing. Nearly one year ago to the exact date Intesa also launched a Eu1bn OBG, a seven year deal, on the final day of the industry’s gathering. Then, as now again, the timing surprised some syndicate officials. One today said that the timing means that the issuer does not face any competing supply, but wondered what else there was to gain by it. As a national champion Intesa could afford to make such a move, however, he added.

Intesa last tapped the benchmark covered bond market in January, pricing a Eu1bn 12 year deal at 150bp over. UniCredit priced the last benchmark OBG, a Eu1bn seven year issue that came at 95bp over.

According to the leads an Intesa April 2017 OBG was trading at around 74bp over mid, on an I-spread basis, before the announcement of today’s deal, and a September 2019 at 78bp over. UniCredit comparables cited include a July 2018 OBG at 77bp over and a January 2020 at 88bp over.

Italy auctioned a new three year bond today and tapped an on-the-run 15 year, and is reported to be selling Eu5.5bn across the two issues.