A EUR750m seven year covered bond for SG today (Monday) showed that the market is there for issuers to secure attractive spreads before the summer break and any potential widening thereafter, as the French issuer’s deal was almost twice-subscribed. Caffil and Erste are set to follow tomorrow.

Société Générale SFH leads ABN Amro, Natixis, NatWest, RBI, Santander and SG priced the EUR750m January 2026 obligations de financement de l’habitat at mid-swaps minus 3bp, down from initial guidance of the mid-swaps flat area, with final books over EUR1.3bn.

“This is one of the tighter prints we’ve seen in the French covered bond segment for a couple of months,” said a syndicate banker at one of the leads. “To get EUR1.3bn of orders is a pretty good outcome at that level.”

The final spread of minus 3bp was seen as incorporating a new issue premium of around 4bp, with syndicate bankers citing SG February 2025s at around minus 9bp, mid.

The deal is SG’s second euro benchmark covered bond of the year, following a EUR750m 10 year issue in January.

Caisse Française de Financement Local (Caffil) announced a mandate this morning for a EUR500m no-grow 20 year public sector obligations foncières, which is expected to be launched tomorrow. Citi, Crédit Agricole, DZ, LBBW and Natixis have the mandate.

Caffil May 2032s, January 2033s and January 2035s were all seen trading at around 7bp, mid, pre-announcement.

Also this morning, Erste Group Bank announced it has mandated DZ, Erste, LBBW and SG to lead manage a six year euro benchmark covered bond that is set to be launched tomorrow.

Syndicate bankers at the leads saw Erste January 2023s at minus 8bp, mid, February 2025s at minus 7bp, and April 2026s at minus 4bp.

This activity comes after the ECB on Thursday announced a reduction in the monthly pace of its net asset purchases from EUR30bn to EUR15bn after the end of September and until the end of December 2018, when net purchases will be brought to an end.

Syndicate bankers suggested the ECB’s announcement may result in a busier than usual run-up to the summer break, with issuers keen to secure funding at what are still very attractive levels before any potential widening in spreads as the ECB reduces its presence in the market.

“We’re not expecting any big deterioration in the market after the summer, but as today’s deals have shown, the market is currently working very well and issuers can still print at attractive levels,” said one. “If you think that spreads are going to widen and have a deal you want to do, why wait?”