De Volksbank issued a twice-subscribed EUR500m 10 year covered bond today (Wednesday), with demand supported by a “fair” final spread, an attractive pick-up versus the last Dutch 10 year benchmark, and a coupon of 1%.

Leads Barclays, Credit Suisse, LBBW and Rabobank launched the EUR500m no-grow issue at 9:00 CET this morning with guidance of the mid-swaps plus 4bp area. After just over one hour, the leads announced that books were above EUR700m, excluding joint lead manager interest.

The spread was set at 1bp at 11:00 CET on the back of books in excess of EUR950m, including EUR25m JLM interest. The book closed at 11:00 CET stood in excess of EUR1bn, including the EUR25m JLM interest.

“It was quite a smooth trade, in contrast to some more sluggish executions in recent weeks,” said a syndicate banker away from the deal. “That partly reflects better market conditions, but also that they quickly found good support.”

The Dutch bank had announced the new issue on Thursday, and held a European roadshow on Monday and Tuesday of this week.

Bankers away from the leads said the deal offered a new issue premium of 2bp-3bp versus de Volksbank’s curve, seeing its May 2027s at minus 4bp-3bp, mid.

“That is a fair price, and is in line with the approach used by some issuers last week, who read the market well and left a bit more premium on the table,” said one.

NIBC and Rabobank, de Volksbank’s compatriots, have both sold 10 year euro benchmarks this year. NIBC’s EUR500m issue was priced at 5bp on 16 January and Rabobank’s EUR1.25bn issue was priced at minus 10bp on 30 January. Both were seen trading at around re-offer today.

Bankers said the differential between de Volksbank and NIBC was appropriate, and noted that de Volksbank’s deal offered an attractive pick-up versus the recent deal for Rabobank, which is now the tightest-trading name in the Dutch covered bond market.

They added that the deal’s coupon, of 1%, would also have supported demand from traditional long end investors. The last core euro benchmark covered bond to offer a 1% coupon was the NIBC 10 year.

De Volksbank’s last benchmark covered bond was a EUR500m 10 year last May.