Crédit Agricole Home Loan SFH tapped a Eu1bn November 2022 covered bond by Eu200m today (Thursday), fixing the spread at minus 8bp and offering only a slim new issue premium, while bankers suggested the wait for a new benchmark deal will go on until the final week of August.

The deal was brought to market in a week in which only one sizeable covered bond has been printed – a Stadshypotek £300m three year on Monday – with no benchmark-sized supply emerging in August during the mid-summer lull.

Lead Crédit Agricole reopened the Eu1bn November 2022 deal with guidance of the mid-swaps minus 7bp-5bp area, before setting the final spread at minus 8bp. The original Eu1bn eight year deal was issued in November 2014 and priced at 2bp through mid-swaps.

A syndicate official at the lead said the deal offered a new issue premium of around 2bp, citing the paper as being quoted at minus 10bp pre-announcement. Syndicate officials away from the leads meanwhile said the price was reasonable.

With many European accounts not expected to return until later this month, syndicate officials said taps were likely to remain more attractive than new benchmarks for issuers.

“We’ve seen in recent trades that execution risk is centred on a deal’s size,” said the Crédit Agricole syndicate official. “Doing a tap is a sensible way to get around that.”

Syndicate officials away from the deal said that while a benchmark covered bond issue could succeed if well priced – noting that a steady supply of AT1, senior and SSA paper had found demand through the week – issuers had little appetite to tap the market.

“Right now, investors are still out there for different sorts of paper if it is attractively priced,” said one. “But in covereds, issuers have completed their immediate to-do list, things are quiet, and I wouldn’t expect anything more than a tap until the final week of August.”