Crédit Agricole Home Loan SFH priced a Sfr225m (Eu182m) seven-and-a-half year covered bond yesterday (Thursday), in a deal that matches Swiss franc assets in the French issuer’s cover pool and comes ahead of the maturity of a Sfr275m deal next month.

Crédit Agricole and Credit Suisse led the 1.125% August 2021 issue, pricing it at 10bp over mid-swaps after having opened books at the 10bp area. A syndicate official at Credit Suisse said that some orders were limited at 10bp over.

The deal was sized to demand, he added, with anything of Sfr200m or greater representing a good result in the Swiss franc market. He described the order book as “quite granular”, comprising over 35 investors, and with asset managers being the main takers.

The seven-and-a-half year maturity was chosen to attract the broadest range of accounts, he said, with the maturity also being duration neutral for many asset managers. He also noted that there had been Swiss franc supply in the 10 year maturity recently.

The only other Swiss franc covered bond this year was a Sfr200m 10 year deal for National Australia Bank on 15 January. That came after a lack of covered bond supply in Swiss francs last year and the syndicate official said that there continues to be a scarcity in the market.

The pricing of Crédit Agricole’s deal included no new issue premium, he said, given that a July 2018 CA Home Loan SFH deal was bid at 7bp over and taking into account the curve from there to August 2021. He added that the pricing was also flat to Caisse de Refinancement de l’Habtitat (CRH), which has a Swiss franc curve extending from two to 11 years.

A Crédit Agricole banker said that the Swiss franc deal met a specific need of the issuer given that it has Swiss franc assets in the cover pool – reflecting home loans for borrowers near the France-Switzerland border – and that issuing in the currency enables it to avoid the need for swaps. As well as a Sfr275m deal maturing in February, which was a three year issue sold in 2011, the issuer has July 2017 and July 2018 bonds outstanding in Swiss francs.

The covered bond was launched into a busy Swiss franc market, with overall supply from foreign issuers coming to Sfr4.1bn so far this year, up on Sfr3.9bn for the full month of January 2013, according to figures from Credit Suisse.

The syndicate banker said that there were no clear indications of further covered bond supply from foreign names, but that deals could materialise quickly and the domestic Pfandbriefzentrale der schweizerischen Kantonalbanken is scheduled to issue next week.