SG issued a EUR750m 10 year covered bond today (Wednesday) at a “punchy” spread impressively close to recent shorter deals from its compatriots and with a smaller NIP than has been the norm in 2018, offering further proof there is no “10 year jinx” as NordLB lines up a 10 year for tomorrow.

A EUR1bn 10 year for CFF on Wednesday of last week raised some concerns over demand in the 10 year part of the curve, being the first deal of the year to show signs of weakness as the spread was tightened from initial guidance of the minus 5bp area to minus 7bp and the book was only marginally oversubscribed.

However, subsequent supply, including a EUR1bn 10 year for Erste yesterday, convinced syndicate bankers that the maturity remained on the menu, and broader market conditions were judged to have improved.

“Erste showed that there is no fundamental problem in the maturity and certainly no 10 year jinx,” said a syndicate banker at one of the Austrian bank’s leads. “It suggests that the question of a 10 year trade’s success is currently to do with the name of the issuer and the jurisdiction, and whether any preceding trade has either prepared or ruined the ground.”

Société Générale SFH announced a mandate for its 10 year euro benchmark obligations de financement de l’habitat yesterday (Tuesday) morning, at the same time that compatriot Caffil was issuing a EUR1.5bn two-tranche, eight and 15 year benchmark.

A syndicate banker at one of SG’s leads said the French issuer targeted the 10 year space because it best fit its needs.

“With a name like SG we were confident that in contrast to CFF, which is a more frequent issuer, there would be more unutilised lines and accounts willing to look at a new 10 year,” he said. “All things equal, we also felt we had moved on a little in terms of how prepared investors were to look at different maturities.”

Leads Banca IMI, Danske, ING, LBBW, SG and UniCredit launched the deal this morning with guidance of the mid-swaps minus 5bp area. Guidance was then revised to the minus 7bp area on the back of more than EUR1.3bn of orders, excluding JLM interest.

The spread was ultimately set at minus 9bp, with books around EUR1.5bn including EUR60m JLM interest. The size was later fixed at EUR750m.

“It is a very strong outcome,” said the lead syndicate banker. “We felt at the outset that this was a trade that could be priced at minus 8bp or minus 9bp.

“Minus 9bp would have been a slimmer new issue premium than we have seen on some of the previous trades this year, so the question was whether investors would subscribe to that. In the end, the spread is a bit punchy, but that is what the order book could deliver.”

The lead syndicate banker added that SG could probably have printed a larger trade given the size of the order book.

Bankers said the spread also looked impressive versus the recent French supply. Caffil yesterday priced its EUR1bn eight year tranche of its deal at minus 10bp, and on Monday compatriot Crédit Agricole priced a EUR1.25bn February 2026 at minus 10bp. Syndicate bankers said SG’s pricing of its 10 year just 1bp wider than the two issues in the eight year part of the curve, albeit for a smaller size, represented a good achievement.

Syndicate bankers noted that SG had adopted a different pricing strategy from the French issuers that had come before. The initial guidance implied a smaller new issue concession and suggested SG was targeting a tighter print, bankers said, calculating that the minus 5bp area level offered a 5bp concession and the final spread incorporated just 1bp of new issue premium.

Crédit Agricole’s trade on Monday was deemed to have paid a 4bp premium, down from an 8bp premium implied by the initial guidance, and Caffil’s eight year a 3bp premium, down from around 6bp at initial guidance.

“People will have understood from that starting point that SG was going for price, which seems to be the case, given that they have printed EUR750m rather than the EUR1bn or EUR1.25bn size used by their peers,” said a syndicate banker away from the leads.

“By all means, a EUR1.5bn book for a EUR750m trade at minus 9bp is a good outcome, but the reason demand might have been slightly less for SG than some other previous trades is that some investors saw they were targeting size and decided this was not one they absolutely had to buy, given they expect SG to issue in other maturities later this year.”

Bankers at and away from the leads cited as comparables for the new issue SG SFH October 2027s at minus 12bp, mid, and the 2027s of fellow French issuers Crédit Agricole, CM-CIC, BPCE and La Banque Postale all between minus 11bp and minus 10bp.

SG also benefitted from a clearer market, bankers noted, being the only issuer in the market with a benchmark euro covered bond today. This followed EUR3bn of issuance yesterday, with Erste having been in the market with its EUR1bn 10 year issue and also UOB with a EUR500m seven year.

NordLB this morning announced a mandate for a 10 year euro benchmark mortgage Pfandbrief, via BayernLB, Natixis, NordLB, Santander and UniCredit. The deal is expected to be launched tomorrow, subject to market conditions.

Syndicate bankers at the leads cited as comparables NordLB October 2026s at minus 14bp, mid, and January 2027s at minus 13bp. Bankers away from the deal suggested fair value will therefore be around minus 12bp.