A Eu500m seven year covered bond for Aegon today (Tuesday) demonstrated the strength of recent spread moves, being priced 6bp inside the final spread of the last Dutch seven year while attracting some Eu1.25bn of orders, offering comfort to compatriot Achmea, which is soon to debut.

Leads Barclays, BNP Paribas, Credit Agricole, Rabobank and SG launched the Eu500m no-grow conditional pass-through (CPT) issue this morning with guidance of the 2bp through mid-swaps area. After around one and a half hours, the leads announced that the books had exceeded Eu1bn.

Guidance was subsequently revised to the 5bp area, plus or minus 1bp will price within range, on the back of more than Eu1.35bn of orders, before the spread was fixed at minus 6bp. The final book stood at around Eu1.25bn.

“It was a textbook trade,” said a syndicate banker at one of the leads. “This is an issuer that investors are now familiar with and this is probably the maturity that the market likes most right now.”

The new issue is Aegon’s fourth benchmark covered bond, with the last a Eu500m 10 year issue on 20 June. The issuer debuted in the covered bond market in November 2015.

Bankers at and away from the leads said the deal offered at most 1bp of new issue premium, with some saying it was priced flat to fair value, seeing Aegon May 2023s at around minus 9bp, mid, and June 2027s at around 2bp and NN Bank October 2024s – the last Dutch benchmark – at around minus 8bp.

“This is an especially nice outcome for Aegon if you consider that NN Bank’s deal was priced flat to mid-swaps on 4 October,” said a syndicate banker away from the deal. “To price 6bp inside just five weeks thereafter is a great result for them.”

The Netherlands’ Achmea Bank is currently marketing an inaugural DNB-registered, CPT covered bond next week, with its European roadshow to end tomorrow. A syndicate banker at one of the leads said the deal could be launched as soon as Thursday, adding that the success of Aegon’s trade could “provide comfort to Achmea that the market is still there”.

“We will see how the market feels on Thursday and see how the recent supply has performed before making the call, and it would be no problem to wait over the weekend,” he added.

Germany’s Sparkasse Hannover meanwhile announced a mandate for an inaugural Eu250m no-grow 10 year mortgage Pfandbrief today, following the conclusion of a European roadshow. The deal is expected to be launched tomorrow (Wednesday).