CFF offered a slightly more generous premium than recent core issuance for a Eu1bn six year covered bond today (Monday), with bankers deeming its approach appropriate, while Caffil increased a 2035 issue by Eu350m. Toronto-Dominion is meanwhile set to price a five year dollar benchmark.

Compagnie de Financement Foncier’s new issue is the first benchmark covered bond for a French issuer in over a month – BPCE sold a Eu1bn seven year on 2 February and CM-CIC a Eu1.5bn six year on 4 February.

CFF leads BayernLB, BNP Paribas, ING, Mediobanca, Natixis and Santander launched the new Eu1bn no-grow six year issue this morning with guidance of the 18bp over mid-swaps area. Guidance was then revised to 16bp, plus or minus 1bp, before the spread was fixed at 15bp. The order book closed at Eu1.8bn.

Syndicate officials said the deal offered a new issue premium of 5bp-6bp, seeing CFF November 2021s, January 2022s and November 2022s quoted between 7bp and 10bp, bid.

Bankers away from the deal said the spread at initial guidance looked generous compared with recent issues and the last French issues, offering a premium of around 10bp at the start.

“It looked a slightly larger premium than the rest of the recent core supply at first, but quite a few of those deals have taken a similar sort of approach and looked to tighten in well from a slightly wide starting point,” said one. “They’re also a regular issuer, with this being their second outing this year, so it makes sense that they might have to offer that bit more.”

CFF sold five benchmark covered bonds last year and on 22 January sold a Eu1bn 10 year issue, which was launched two days later than expected, when markets deteriorated after a mandate for the deal had been announced. The deal attracted orders of over Eu1bn and was priced at 25bp, in the middle of guidance.

“Their last deal didn’t go great, so you can understand if they were slightly cautious in their approach,” said another syndicate official. “This level looked attractive and the size is limited, which is good.

“In the end it’s gone pretty smoothly.”

Syndicate officials added that the deal also offered a pick-up of more than 30bp from OATs.

Caisse Française de Financement Local (Caffil) leads Barclays and Natixis reopened the Eu500m January 2035 issue at 34bp over mid-swaps, in the middle of guidance, increasing the deal by Eu350m on the back of over Eu400m of orders. The deal was first priced in January 2015 at 19bp over mid-swaps.

Syndicate officials said attention was today focussed on the senior market, with HSBC, Morgan Stanley and BFCM each selling euro benchmark issues. However, they said further covered bond supply is likely tomorrow and on Wednesday, with some issuers expected to be keen to come to the market ahead of an ECB meeting on Thursday at which new measures are expected to be announced.

“Overall the market feels OK, with equities down a bit, but it does feel like people are trying to access the window before Thursday,” said one.

Toronto-Dominion leads Citi, HSBC, RBC and TD launched the Canadian’s five year US dollar benchmark issue with initial price thoughts of the high 90s over mid-swaps area. The deal is set to be priced after the US open.

Syndicate officials noted that the initial price is roughly in line with the levels at which this year’s previous benchmark dollar supply was priced, following a $500m five year Kookmin issue priced at 95bp on 28 January and a $1.35bn five year Westpac issue priced at 98bp on 18 February.