Crédit Agricole today (Wednesday) attracted combined orders of over Eu5.8bn for a dual-tranche Eu3.25bn seven and 15 year deal that is the biggest transaction in the market since the onset of the financial crisis, and bankers said demand for the longer tranche suggests that the long end is open again.

Crédit Agricole announced a mandate for the deal yesterday (Tuesday), after having on Monday launched a cash tender offer for up to Eu2bn of “off market” euro-denominated hard bullet covered bonds. The settlement date of the tender offer, 24 March, coincides with that of the new issue.

Crédit Agricole Home Loan SFH leads ABN Amro, BayernLB, Crédit Agricole, Erste, LBBW, NAB and Santander this morning launched the seven year tranche with guidance of the 12bp over mid-swaps area, and the 15 year with guidance of the 29bp area. The seven year tranche was then re-offered at 9bp and the 15 year at 26bp on the back of combined books of over Eu4bn.

The book closed at 10:30 CET at around Eu3.175bn for the seven year tranche and around Eu2.65bn for the 15 year tranche. The size of the seven year tranche was then fixed at Eu1.75bn and the 15 year tranche at Eu1.5bn.

“It’s a stunning deal,” said one. “It’s the biggest deal in this market that I can remember, and it’s massively subscribed.”

Some syndicate officials away from the leads said both tranches offered premiums of 5bp-6bp, based on Crédit Agricole’s curve.

As comparables for the seven year tranche, they cited Crédit Agricole November 2022s at 2bp, mid, and September 2023s at 4bp, while they said fair value for the 15 year tranche is more difficult to calculate, given that Crédit Agricole’s longest dated outstandings are 2025s. However, they estimated interpolated fair value to be around 20bp.

Other syndicate officials, however, noted that Crédit Agricole’s curve had tightened by 1bp-2bp more than other French paper since the start of the week, on the back of the announcement of the issuer’s tender offer.

“It looks more expensive versus recent French supply, but it depends on what investors are looking at,” he said. “But that said, it clearly hasn’t stopped many people getting involved.”

Bankers added that the size of demand for the 15 year tranche was particularly encouraging, with the majority of supply since the start of the year having been focused in medium maturities.

“The only real takeaway from the longer dated supply we’ve had so far this year was that demand at the long end was limited,” said one. “But in recent sessions we’ve seen an extension in maturity across markets, with rates pulled down by Draghi and appetite increasing.

“I think this should reopen the long end in covereds.”

Syndicate officials said further supply is likely this week, even though today’s deals emptied the pre-announced pipeline, with only Van Lanschot on the road.

“I think we’ll see more,” said one. “The public pipeline has cleared quickly, but there are issuers from across the board still looking, and with Easter next week I’d expect people to use this very receptive window.”