A Eu1.25bn 10 year covered bond for CM-CIC today was interpreted as proof that strong demand persists at the longer end even though intermediate maturities have been in vogue, with the deal’s book peaking at Eu2.2bn, allowing for a print just 1bp wide of fair value.

Since WL Bank priced a Eu500m 10 year Pfandbrief on 22 August, all six of the euro benchmark covered bonds brought to market have been in the five to seven year part of the curve, where bankers say demand will be deepest in the coming weeks.

Leads Credit Suisse, Danske, Deutsche, and SG launched Crédit Mutuel CIC Home Loan SFH’s new 10 year issue with guidance of the 5bp over mid-swaps area this morning. The leads announced after around one hour and 10 minutes that the book had topped Eu1.5bn.

Guidance was later revised to the 2bp area, plus or minus 2bp will price within range, for an expected size of Eu1.25bn, with books at over Eu1.9bn, excluding joint lead manager interest. The spread was then set at flat and the size at Eu1.25bn, with books closing at Eu2.2bn pre-reconciliation.

“We’re very happy with this result,” said a syndicate banker at one of the leads. “To print Eu1.25bn at flat with such a small concession is very encouraging.”

The final spread was seen as incorporating a new issue premium of 1bp, with bankers citing CM-CIC April 2026s – the issuer’s longest dated outstanding – at around minus 3bp, mid.

Some syndicate bankers had suggested that the 10 year part of the curve was beginning to feel tired, after WL Bank’s Eu500m issue on 22 August attracted a relatively modest Eu630m of orders, coming after long dated deals from MünchenerHyp and Commerzbank.

However, the reception enjoyed by today’s CM-CIC deal was seen as proof that demand remains strong at the longer end for deals from the right name and with the right price.

“Even if the reconciled book is somewhat less than the Eu2.2bn peak, the fact the deal pulled in so much interest at these tight levels show that there is still good demand for high quality 10 year paper,” said one.

A syndicate banker at one of CM-CIC’s leads said they had been able to take encouragement from a Eu5bn 10 year KFW issue yesterday (Tuesday) that attracted some Eu10.6bn of demand.

“The market is probably most exciting in the five to seven year part of the curve right now, but as KFW shows, anything 10 years or shorter seems to go very well at the moment,” he said.

The new issue is CM-CIC’s second benchmark issue this year, following a Eu750m eight year in January. It comes after Compagnie de Financement Foncier on Monday launched the first post-summer French covered bond benchmark, a Eu1.25bn long seven year.