CFF neared completion of its 2014 funding programme with its fourth and largest euro benchmark of the year yesterday (Monday), a Eu1.5bn seven year that an official at the issuer highlighted was larger and longer than a Eu1bn five year priced at the same level two months ago.

After announcing the deal on Friday, leads Barclays, BayernLB, Natixis, Santander and UniCredit yesterday morning went out with initial guidance of the mid-swaps flat area. With orders totalling some Eu2.25bn after about 50 minutes, the guidance was revised to the minus 3bp area, and books were closed an hour later at over Eu3.25bn. The re-offer was fixed at mid-swaps minus 5bp, with over Eu3.1bn of orders firm at that level. According to a banker at one of the leads, the deal offered no new issue premium and was priced 1bp inside interpolated OATs.

Paul Dudouit, head of medium and long term funding at Compagnie de Financement Foncier, highlighted the greater size and tenor that the issuer achieved versus its most recent issue at the same price.

“We achieved mid-swaps minus 5bp on this seven year, the same level as the five year at the beginning of September,” he said, “but it is for a larger size, Eu1.5bn compared with Eu1bn for the five year, and also a longer maturity, seven years compared with five years.

“It’s the tightest level achieved in the covered bond universe outside Pfandbriefe since the onset of the financial crisis,” he added.

Distribution to central banks and other official institutions, at 44% of allocations, was exactly the same proportion as on the September five year. The previous deal was launched just after CBPP3 was announced, but before buying began, while a CBPP3 order for a “significant amount” was placed for the new issue, according to the lead banker.

Dudouit said that while the support of the ECB programme is positive, the issuer is keen to maintain its traditional investor base.

“We have got this support from the ECB programme so we are in a good position to have a bid from the Eurosystem – from an issuer point of view, that is of course very positive,” said Dudouit. “But at the same time we are also taking care of our traditional investor base.”

Alongside the central bank and official institution share, banks were allocated 29%, funds and asset managers 22%, and insurance companies and pension funds 5%.Germany and Austria took 37%, France 34%, Asia 11%, Switzerland 6%, the Benelux 5%, Italy 2%, Spain and Portugal 1%, and others 4%.

The euro benchmark is CFF’s largest since a Eu2bn three year in February 2012, and Dudouit said that the issuer had been aiming for Eu1.5bn from the outset.

The new issue is CFF’s fourth euro benchmark of the year, coming after a Eu1bn five year in March, a Eu1bn 10 year in April, and September’s Eu1bn five year. Dudouit said that, with the launch of the latest benchmark, the issuer is in line with its funding plan for 2014 and nearing completion of the budgeted amount.