BBVA priced its first benchmark covered bond in more than a year yesterday (Wednesday), a Eu1bn 10 year that was launched to take advantage of “a clear issuance window” and a back-up in Bund yields helpful for duration trades, according to a lead syndicate banker.

The deal was one of three new issues in the market yesterday, with Finland’s OP Mortgage Bank and the UK’s Yorkshire Building Society also pricing deals before keenly anticipated ECB announcements today (Thursday). BBVA’s deal was the only one of yesterday’s transactions that was executed intra-day, with the others having been flagged before yesterday.

Leads Bank of America Merrill Lynch, BBVA, Crédit Agricole, Commerzbank and Natixis priced BBVA’s cédulas hipotecarias issue at 73bp over mid-swaps, the tight end of guidance of the 75bp over area. More than Eu1.5bn of orders were placed for the deal from over 115 accounts, according to a lead syndicate official.

He said the transaction was launched in response to a positive market environment, with an increase in Bund yields the day before a supportive factor.

“The market is down from its highs, at least in terms of Bund Futures,” he said. “There was a clear issuance window without competing supply in 10 years.”

At 73bp over, BBVA’s latest issue came 142bp inside where it priced a Eu1bn 10 year priced in January 2013, which was also the bank’s last euro benchmark covered bond. The last 10 year Spanish covered bond was a Eu1bn deal for CaixaBank priced at 80bp over mid-swaps on 11 March.

The lead syndicate official said the new issue premium paid by BBVA on its latest issue was 5bp-7bp, but that this was based on old bonds with high off market coupons and that such a new issue concession is also not unusual for 10 year transactions. He put fair value at 66bp-67bp over based on an interpolation of the curve from BBVA 2023s and 2025s.

Investor distribution by type was typical for a long dated transaction, said the syndicate official, with more than two-thirds of the bonds bought by real money accounts.

Asset managers were allocated 42%, insurance companies and pension funds 25%, banks 24%, and central banks 9%.

Germany and Austria took 28%, France 20%, Iberia 18%, the UK and Ireland 13%, Benelux 9%, Asia and Middle East 7%, Italy 3%, and Switzerland 2%.