Rabobank bestrode the covered bond market today (Thursday), taking advantage of a buoyant but clear pre-ECB window to issue a EUR2bn 10 year deal that attracted EUR6bn of demand from some 250 accounts at a 1bp new issue premium, which bankers said represented an unprecedented success.

The Dutch issuer was just the latest of many to tap into resurgent demand for covered bonds at wider, post-CBPP3 levels, coming after EUR13bn of euro benchmarks from 14 issuers in the first three days of the week, most of which were two or more times oversubscribed.

But despite coming late in the week, the bank was able to top the lot with an order book larger than any banker spoken to by The CBR could remember, at least in the post-financial crisis era.

“It is phenomenal,” said a lead banker. “It is difficult not to hyperbolise about it. The last precedent like this was probably 2006, 2007.

“When you’ve got a two yard deal and add on that it is three times covered, and you are paying a new issue premium of just 1bp, there is no comparable trade out there in memory.”

Rabobank’s mandate was announced yesterday (Wednesday) afternoon for launch in the near future, and was expected today in a potentially clear market, with syndicate bankers saying that other issuers would probably be less confident approaching the market on the morning of an ECB governing council meeting.

Leads BNP Paribas, Deutsche, HSBC, NatWest and Rabobank duly went out into a clear euro benchmark covered bond market with initial guidance of the 20bp over mid-swaps area this morning for the 10 year deal. Within 45 minutes the leads announced that books had topped EUR2.5bn, excluding joint lead manager interest.

“I have not seen a book grow that fast in years and years,” said the lead banker, “if not ever.”

After an hour and three-quarters books were above EUR5bn, excluding JLM interest, and the pricing was revised to 16bp+/-1bp, WPIR, and the deal was re-offered at 15bp over on the back of books of around EUR6bn, comprising around 250 accounts, pre-reconciliation.

A banker away from the leads described the order book and 5bp move as unprecedented.

The lead banker said that the level of demand reflected the deal’s timing and support for the credit.

“They’ve helped themselves get this victory, with great timing, brilliant execution strategy – they announced it yesterday so that we would open with momentum this morning ahead of the ECB – and they’ve had the market to themselves. It’s the issuer with probably the biggest investor sponsorship globally of any bank in the world – who else gets 250 investors?

“And they haven’t issued that much – they only started issuing covered bonds in 2017.”

He also noted that the 10 year maturity had been relatively undersupplied, and that as well as being confident about spreads, investors are not expecting any imminent nasty surprises on rates.

The tightening of 5bp from the middle of initial guidance to re-offer is the biggest move of any amid this week’s wave of supply and unusually large for a core Eurozone deal. The lead banker pointed to the strength of the order book as explaining Rabobank’s ability to move pricing thus.

A banker away from the deal said that, particularly coming after Banca MPS’s trade yesterday, Rabobank’s execution will only reinforce interest in the market from more issuers.

“I’d be surprised if every single issuer that hasn’t done a deal is not looking at the market,” he said, “and clearly issuers who have already done deals will also be looking at it, as LBBW did in coming back for round two already.”