CFF and SEB tapped the long end to reopen the euro market today (Tuesday), the French issuer pricing a Eu500m 15 year “blowout” on the back of a Eu2.55bn book, and the Swedish bank sold a Eu750m 10 year at the same spread as a recent, smaller 10 year from its compatriot.

Today’s supply is the first euro benchmark covered bond issuance in exactly two weeks, with the last previous a Eu500m 10 year issue for Stadshypotek on 24 October.

Compagnie de Financement Foncier (CFF) leads BBVA, Commerzbank, LBBW, Natixis and SG launched the Eu500m no-grow 15 year issue with guidance of the mid-swaps plus 14bp area this morning.

Books exceeded Eu1bn in less than one hour, and guidance was subsequently revised to the 10bp area, plus or minus 2bp will price within range. The spread was ultimately set at 8bp, with Eu2.55bn of orders from more than 100 investors good at re-offer, including Eu125m JLM interest.

Bankers highlighted that the deal had the highest oversubscription rates of any French covered bond in recent years, with demand deemed to have been supported by the relatively rare maturity.

“The level of oversubscription is truly impressive, especially for a long dated deal that offers no new issue premium,” said a syndicate banker away from the deal. “It’s a blowout.”

Syndicate bankers at and away from the leads said the deal was priced 2bp inside fair value, citing CFF April 2031s at 9bp, mid. It offered a pick-up over recent 15 year supply from other French issuers, however, with Crédit Agricole March 2032s seen at 1bp, mid, and Caffil May 2032s at 3bp.

The deal is CFF’s fourth benchmark covered bond of the year, with the last a Eu1.25bn long seven year on 4 September.

Following a mandate announcement yesterday (Monday) afternoon, Skandinaviska Enskilda Banken (SEB) leads BNP Paribas, Deutsche Bank, HSBC, Nomura and SEB launched the 10 year issue with guidance of the mid-swaps minus 1bp area this morning.

After around one-and-a-half hours, the leads announced that books had exceeded Eu1bn, excluding joint lead manager interest. Guidance was subsequently revised to the minus 4bp area, plus or minus 1bp will price within range, on the back of around Eu1.2bn of orders, excluding JLM interest.

The size was later set at Eu750m and the spread at minus 5bp.

The new issue extends SEB’s curve by three years. Its longest dated outstanding is a June 2024 issue priced at minus 5bp on 13 June and seen trading at around minus 13bp, mid.

Bankers said the most appropriate comparable for the deal is the recent Eu500m 10 year issue for Stadshypotek, SEB’s compatriot, which was priced at minus 5bp and seen trading at around minus 6bp, mid, pre-announcement.

Bankers noted that SEB tends to trade slightly inside Stadshypotek at the shorter end of the curve, and suggested fair value for the new issue was therefore around minus 7bp.

“It’s a punchy price,” said a syndicate banker away from the deal. “To print Eu250m at the same spread as Stadshypotek, and to price a new 10 year at the same spread they got with a seven year in the summer, is a fine result.”