Intesa Sanpaolo attracted Eu2.4bn of orders for a “potentially difficult” but ultimately successful Eu1.25bn 10 year covered bond today (Thursday), and bankers, while disagreeing on the size of the premium, said the Italian issuer paid up to get the deal done in a decelerating market.

Intesa’s new issue hit the market after a three year from CIBC on Monday and a four year from UniCredit Bank AG yesterday (Tuesday) found good traction and were comfortably oversubscribed, defying the expectations of some bankers that supply would dry up this week with some accounts done for the year.

Syndicate officials had nevertheless noted that uncertainty remained around rates at the longer end, with shorter-dated deals looking attractive after a back-up in rates following the announcement by the ECB of smaller than expected additional easing measures on Thursday.

Intesa leads Banca IMI, Deutsche, HSBC, Natixis, RBS and UniCredit launched the euro benchmark 10 year deal with guidance of the 58bp over mid-swaps area, before re-offering the deal at 55bp after having taken Eu1.7bn of orders. The deal’s size was then fixed at Eu1.25bn and the book closed at Eu2.4bn.

“This was potentially a difficult trade, being at the 10 year point of the curve, for a peripheral issuer, and in the last execution week of the year,” said a syndicate official at one of the leads. “But in the end we had very good engagement, particularly from the real money community.

“The books built very smoothly throughout and closed at a good size, and we were able to tighten the spread by 3bp, which is in line with if not better than the spread moves we’ve seen in most recent deals.

Syndicate officials away from the leads agreed that the deal had gone well.

“It looks like it has gone well and found very good demand,” said one, “but it does look cheap, and the size of the books reflect that.”

Syndicate officials away from the leads said the pricing looked generous when compared with the secondary levels of Intesa’s outstandings in the 10 year part of the curve. Seeing Intesa January 2025s quoted at around 32bp, bid, and February 2026s at 33bp, they said the deal offered a new issue premium of around 20bp.

The lead syndicate official new issue premium was smaller than this, however, arguing that the issuer’s more recent January 2022s, which were priced at 25bp in January and were seen quoted at that level on the bid, were a more useful reference point.

“You can look straight at their outstandings but it is a very flat curve, which you have to be cognisant of because that is not the construct of a new trade,” he said. “If you look at it from the January 2022s and then build out with a bit of concession from there, then the new issue premium doesn’t look so large.

“Yes, it’s still more than we’ve seen in recent deals, but they have all been short duration, safe, low beta jurisdictions, whereas this is a longer-dated, peripheral issue, even if Intesa is a tier one name.”

Syndicate officials at and away from the leads said the new issue came around 10bp through the December 2025 BTP.

“But relative value versus the sovereign is not the main selling point of this deal,” said a syndicate official away from the leads. “The main selling point is the attractive pick-up versus other covereds and the issuer’s own curve, for what is one of the better Italian names.”

Intesa is the fourth Italian issuer to tap the 10 year part of the curve since October, after a Eu500m issue for Mediobanca on 3 November, a Eu1bn for Banca Monte dei Paschi di Siena on 19 November, and a Eu750m for Banca Popolare di Milano on 25 November.

Syndicate officials disagreed over the likelihood of further issuance this week, noting that tomorrow (Thursday) could be the last window before the end of the year.

“There’s a couple of deals in corporates out there but in financials it’s pretty quiet,” said one. “Equities are a tad lower today, and there is pressure on oil prices, so there’s a few things moving against the market.

“I don’t think we’re necessarily going to see much more.”

However, a syndicate official at one of Intesa’s leads said that when they contacted accounts yesterday afternoon, some said they were done for the year, but many said they would still be receptive to new deals if they had the right price.