Announcements from the ECB on Thursday were a decisive factor in Mediobanca’s decision to return to market yesterday (Tuesday) for a second euro benchmark covered bond, which was priced at one of the tightest ever levels for an OBG, according to a banker involved in the deal.

Leads Commerzbank, Mediobanca, Natixis and Société Générale went out with initial price thoughts (IPTs) of the 55bp over mid-swaps area for a five year deal, then revised the spread to go out with guidance of 53bp over area. After more than Eu1.5bn of orders had been collected, the spread was fixed at 51bp over and the size set at Eu750m, making it one of the tightest OBGs ever, and the tightest in more than four years.

A banker on the deal said, in response to suggestions the pricing was slightly tight versus outstandings, said that the leads had decided from the outset “to be aggressive and announce IPTs inside fair value”, adding that the final spread represented a great success, with an order book comprised of over 100 “good quality” accounts.

“The ECB announcements proved a decisive factor both in terms of pricing strategy and the decision to return to market as quickly as possible in the wake of the announcements,” he said. “However, the decision to issue our second covered bond had been made prior to Thursday, but it was felt that it would be best to wait until after it.”

The banker said yesterday offered “the first truly useful day to issue”, citing Friday as a poor day for issuance and noting the bank holiday across continental Europe on Monday.

Mediobanca wanted to return to the market with its second euro benchmark, following a Eu750m 10 year debut in October 2013, so that it could populate its covered bond curve, according to the banker, who added that the timing was right as it allowed the issuer to take advantage of strong market conditions and tightening peripheral markets.

“All in all, the deal was a success, we set the size at the maximum possible and priced 7bp-8bp inside fair value,” he said. “As for future issuance, the issuer has yet to decide what its 2014/2015 approach will be.”

He added that part of the strategy devised by the leads was to announce early in the morning to “jump start” the market as there were concerns another Italian financial institution would issue and take investor interest away from Mediobanca.

Another syndicate official noted that Intesa Sanpaolo priced a Eu1bn seven year senior unsecured transaction at 98bp over mid-swaps yesterday.

Italy was allocated 40% of the bonds, Germany and Austria 22%, UK and Ireland 9%, Iberia 8%, France 8%, the Benelux 5%, Switzerland 4%, and Asia 4%.

Banks took 38%, asset managers 35%, central banks and public institutions 21%, and insurance companies 6%.