France’s CFF yesterday (Tuesday) acted on an issuance opportunity it had been awaiting after late last year having regained ECB repo eligibility and achieved CRD IV compliance, and an official at the issuer said the response to its deal was “extremely positive”.

The transaction was a Eu1bn no-grow five year obligations foncières issue that leads BayernLB, HSBC, Natixis, Société Générale and UniCredit priced at 16bp over mid-swaps, the tight end of guidance of the 17bp over area. Initial price thoughts had been set at the 20bp over area.

More than Eu2.1bn of orders were placed for the benchmark covered bond, with more than 100 accounts participating.

The deal is the issuer’s first benchmark since November 2012, and comes after Compagnie de Financement Foncier in December announced that its covered bonds had regained ECB repo eligibility after the issuer disposed of all the securitisation tranches in its cover pool. CFF also achieved compliance with the Capital Requirements Directive (CRD IV) as of January,

Paul Dudouit, head of medium and long term funding at CFF, said that the issuer was not in a rush to issue after having completed the restructuring of its cover pool and therefore prioritised finding appropriate market conditions.

“For us it was about waiting for a good issuance window to return to market,” he said. “We monitor the market regularly and felt that conditions were better yesterday after the situation in Ukraine became a bit clearer.”

He noted that the order books grew quickly, and that more than 85% of the obligations foncières were placed with investors outside France, with strong support from central banks and SSAs.

Banks were allocated 37%, asset managers 31%, central banks and official institutions 27%, and insurance companies and pension funds 5%.

Germany and Austria took 40%, the UK and Ireland 16%, France 12%, Switzerland 10%, Asia 8%, the Nordics 7%, the Benelux 4%, and others 3%.

“It was a great result,” said Dudouit. “The size and granularity of the order book show investors appreciate our credit.”

As previously reported, CFF has in the past explored the possibility of issuing Samurai covered bonds, and Dudouit said that the issuer has not abandoned this project.

“A frequent issuer like CFF always has to look at ways of expanding and diversifying our investor base, and Samurai issuance would correspond to that,” he told The CBR.