Crédit Agricole took an opportunity presented by post-French election relief to load duration in size with a twice-subscribed Eu1.5bn 10 year OF today (Wednesday), swiftly following a Eu1.5bn 10 year senior note yesterday, with French covered bonds deemed tempting after a rally in OATs.

Since the first round of voting in the French presidential election on Sunday, French government bond spreads have tightened as much as 30bp in some parts of the curve. French covered bond spreads, which had widened in the run up to the vote, have also tightened this week, but by a more modest average of around 4bp. These moves made French covereds even more attractive to investors, bankers said, after a recent hiatus in issuance.

“French paper has been very well bid, and there is clearly a lot of relief – maybe even euphoria – in the market following Sunday’s vote, allowing Crédit Agricole to put together a very strong trade today,” said a syndicate banker away from the leads.

Crédit Agricole, Danske Bank, Erste Group, Lloyds and Natixis launched the 10 year obligations de financement de l’habitat for Crédit Agricole Home Loan SFH with initial price thoughts of the 10bp over mid-swaps area, at just after 9:10 CET this morning.

In less than half an hour, the leads announced that books had exceeded Eu1.5bn. At just before 9:55, guidance was set at the 7bp area plus or minus 2bp, will price within range, on the back of over Eu2.25bn of orders. The books closed at 10:15 at “well above” Eu3bn with the spread then set at 5bp and the size at Eu1.5bn.

“It was a lightning fast trade,” said a banker away from the leads. “To get Eu3bn demand in such quick time and to tighten the spread as they did is clearly a great outcome.”

The new issue comes after Crédit Agricole yesterday (Tuesday) reopened the French senior market, printing a Eu1.5bn 10 year senior preferred note on the back of Eu3.9bn of orders.

A syndicate banker at one of the leads on today’s deal said the senior preferred issue had shown strong evidence that there was demand for duration in the wake of the elections, and noted that the 10 year OAT had meanwhile been stable, trading around the mid-single digits over mid-swaps, following the initial rally.

“I think it is wise to take the opportunity to load 10 year in size across formats,” he added.

The deal was deemed to have been priced in line with or slightly inside the French sovereign, with the May 2027 OAT seen at 5bp-6bp this morning – having been trading in the mid 20s last week. In contrast, some of the most recent benchmark French covered bonds had in February been priced as much as 7bp inside OATs.

The lead syndicate banker noted some prominent UK and French investors re-entered the sector in size on the new covered bond.

Bankers said that the deal offered a new issue premium of around 3bp, seeing Crédit Agricole Home Loan SFH February 2024s and April 2025s both at minus 3bp, bid, March 2031s at 9bp and February 2032s at 19bp.

Some also noted the deal had been priced inside an October 2026 issue for Crédit Agricole Public Sector SCF, which was quoted at 7bp, bid, today.

The new issue means Crédit Agricole has printed Eu4.4bn of benchmark covered bonds year-to-date – all via Crédit Agricole Home Loan SFH. It raised Eu2.5bn in a triple-tranche, long eight, 15 and 20 year offering on 25 January, before tapping the 20 year tranche by Eu400m on 6 February.

It is the first French benchmark since 7 March, when Axa Bank Europe SCF sold a Eu1bn five year.