Achmea sold an inaugural DNB-registered, CPT covered bond today (Thursday), pricing the Eu500m seven year issue at the same spread as a trade of the same size and maturity from established compatriot Aegon on Tuesday, although some bankers questioned whether slightly lower demand was a sign of market fatigue.

The new issue is the first benchmark from a Eu5bn conditional pass-through (CPT) residential mortgage programme that was established by Achmea earlier this month and, unlike an older soft bullet programme used by the issuer, is registered with the Dutch central bank (DNB) and eligible for preferential regulatory treatment.

Following the completion of a European roadshow yesterday (Wednesday), leads ABN Amro, Citi, Rabobank, SG and UniCredit launched the Eu500m no-grow issue this morning with guidance of the 2bp through mid-swaps area. Guidance was later revised to the minus 4bp area on the back of over Eu800m of orders.

The spread was then set at minus 6bp on the back of over Eu1bn of orders, including Eu35m joint lead manager interest.

“It’s a fine debut, being comfortably twice subscribed and landing at the same spread as supply from a more established name,” said a syndicate banker away from the leads.

The new issue follows a Eu500m seven year CPT covered bond for Aegon on Tuesday, which was also priced at minus 6bp on the back of around Eu1.25bn of orders. The spread is a record low for Dutch CPT supply.

“The somewhat lower demand for Achmea’s trade, like Deutsche Hypo’s green Pfandbrief today, probably shows that it is not a never-ending story of tighter prices and bigger books,” said a syndicate banker away from the leads. “It’s still a good trade at a very good level, but perhaps we are seeing some signs of tiredness today.”

Another syndicate banker disagreed, however.

“I wouldn’t read too much into these books,” he said. “Investors have already been offered a seven year Dutch CPT issue this week, and some investors might not yet be ready to take part in Achmea’s trade, it being a debut.”

Bankers at and away from the leads said the deal offered 1bp-2bp new issue premium, seeing Aegon’s newly issued November 2024s at around minus 7bp, mid and NN Bank October 2024s at around minus 8bp.

“It is a pretty small premium to pay for an inaugural deal, but it is arguably more than most trades we’ve seen in recent weeks,” said a syndicate banker away from the leads.

Achmea had previously issued covered bonds through a non-registered soft bullet programme, which was set up in 2007 before Dutch covered bond legislation was in place and did not meet UCITS or CRD/CRR requirements that would make it eligible for preferential regulatory treatment. The last bond outstanding off this programme matured in August.