Compagnie de Financement Foncier identified a stable window in a post-ECB upturn in market conditions to sell a Eu1bn 10 year OF on Friday, and CFF’s Paul Dudouit said the deal was “a great achievement” given the difficulties of pricing a longer dated deal in a still turbulent environment.

CFF announced a mandate for a 10 year benchmark on Tuesday and had been expected to launch the deal on Wednesday, before markets deteriorated.

“On Wednesday we met quite strong volatility, in a complex environment, so we decided to wait and use the first stable window that was available,” said Paul Dudouit, head of medium and long term funding at CFF. “This is a window market.

“In the context of the volatility we have seen since the beginning of the year – especially for a 10 year trade, which is quite a technical maturity to achieve – you need to monitor very closely the market conditions to execute a transaction.”

In a more stable environment on Thursday, CFF’s French peer Crédit Agricole then launched a Eu1.5bn long four year issue, before a positive market reaction to an ECB meeting on Thursday afternoon was deemed as further improving issuance conditions.

“Just after the ECB we identified a clear window to put this kind of maturity on the market,” said Dudouit.

Leads Commerzbank, Lloyds, Natixis, Nykredit and UBS launched the obligations foncières (OF) on Friday morning with a Eu500m minimum size and initial price thoughts of the mid-20s over mid-swaps, before issuing guidance of the 25bp area on the back of books over Eu750m. The deal was then re-offered at 25bp and the size set at Eu1bn, with the book closing at over Eu1bn.

“The order book grew very rapidly this morning, and we achieved Eu1bn, which was our target,” said Dudouit. “We are very pleased with the development of the deal and how the process was conducted during this difficult period.

“It was a great achievement in this market.”

Some 51 accounts were in the final order book. Central banks and official institutions bought 48% of the deal, banks 27%, asset managers 21% and insurance companies, and pension funds 4%. France 43%, Germany 36%, the Benelux 8%, Switzerland 4%, Asia 2%, Nordics 2%, and others 5%.

Syndicate officials had noted that shorter dated deals had met better demand in recent weeks, but Dudouit said CFF was convinced that the 10 year maturity was appropriate.

“We have a very close contact with our investor base, and during the last two weeks we had feedback that indicated investors were looking for this duration in covered bonds, and for this kind of transaction,” he said.

The new issue was priced with a 1% coupon after 10 year swap rates were up 3bp to 80bp on Friday, after having remained stable on Thursday. A syndicate official away from CFF’s leads had suggested that an important factor in the issuer’s decision to not enter the market on Wednesday was that 10 year swap rates fell by 5bp-7bp on the day, meaning the deal would have been unlikely to be priced at 1%.

CFF had two benchmark covered bonds maturing this month, a Eu1bn issue on 14 January and a Eu2.75bn issue on Monday of last week (18 January), but Dudouit said this had not influenced the timing of the new issue.

“We already managed these redemptions at the end of 2015, and we are now executing our funding plan for 2016,” he said.

Dudouit added that CFF expects to issue another Eu5bn of covered bonds this year.