Norway’s SpareBank 1 Boligkreditt drew over €1.5bn of demand to a €1bn 10 year deal today (Tuesday), ahead of a possible “big wave” of CBPP3-eligible supply, with BPCE likely joining DKB on restart day tomorrow. Idiosyncratic deals from Danish Ship Finance and Deutsche are also in the pipeline.

After announcing the mandate this morning, SpareBank 1 Boligkreditt (SpaBol) leads Commerzbank, Crédit Agricole, Credit Suisse, DZ and Santander went out with guidance of the mid-swaps plus 13bp area for the 10 year euro benchmark. After around an hour and 10 minutes, books were reported as being over €1bn, excluding joint lead manager interest, and the deal was ultimately priced at 10bp and sized at €1bn (NOK10.2bn) on the back of over €1.5bn of orders, including €100m JLM interest.

“Being able to set €1bn at plus 10bp definitely underlined that the market appreciated this,” said a syndicate banker at one of the leads.

According to pre-announcement comparables circulated by the leads, the issuer’s January 2029 paper was trading at 5.5bp over mid-swaps, and the syndicate banker put fair value at around 6bp-6.5bp.

“Given the fact they were able to do €1bn and that this is non-CBBPP3-eligible, the 3.5bp-4bp new issue premium should suit more or less everyone,” he said. “For non-ECB buying programme-eligible transactions, people are expecting a little more NIP.”

But a syndicate banker at another of the leads said that a €1bn 10 year from La Banque Postale issued on 14 October at 8bp over mid-swaps could be considered a more apt reference than SpaBol’s own outstandings, noting that the Norwegian issuer had come “a mere 2bp” wider than the “top” French, CBPP3-eligbile issuer.

“Historically, the difference has been a lot more than that,” he said.

With some €1bn of issuance to do before year-end, SpaBol decided to approach the market now partly to avoid a possible forthcoming “big wave of supply” from CBPP3-eligible issuers who have more to gain from waiting until buying starts, potentially as early as tomorrow (Wednesday), according to the lead banker.

He said the choice of 10 years was in line with the maturity’s recent popularity with issuers given the flatness of the curve, while by offering a positive yield (of 0.167%) and spread SpaBol could attract real money accounts and asset managers as well as bank treasuries able to play further along the curve. The deal is SpaBol’s second 10 year benchmark of the year, after a €1.25bn issue in January, while it sold a €1bn seven year in May.

Whether the Eurosystem will take immediate advantage of being able to buy for the restarted CBPP3 should become clear on new issues for Deutsche Kreditbank and BPCE tomorrow.

While the German issuer flagged its potential €500m no-grow 10 year “blue” social issuance on Monday, a mandate for a BPCE SFH seven year obligations de financement de l’habitat euro benchmark was announced today for launch in the near future, subject to market conditions. Danske, HSBC, JP Morgan, LBBW, Natixis, NordLB and UniCredit are leads.

Danish Ship Finance (Danmarks Skibskredit) is planning its second euro benchmark after a debut in March, with the announcement today of a roadshow ahead of a €500m no-grow covered bond, subject to market conditions. The roadshow will run from next Tuesday to 11 November. Credit Suisse, LBBW, Nordea and UniCredit have the mandate.

And Deutsche Bank is meeting with investors next week to discuss a potential public issue off a structured conditional pass-through covered bond programme it established in 2016.