Crédit Mutuel Home Loan SFH attracted over €2bn of demand to a €1.25bn 10 year deal today (Thursday) and achieved a negligible new issue premium, as supply slowed despite market conditions remaining favourable. NordLB CBB has meanwhile re-announced a green mandate after an upgrade.

A syndicate banker away from the leads said the French deal, the 12th euro benchmark transaction of the week, represented yet another successful issue.

“It’s a super-receptive market at the moment,” he added.

A syndicate banker at one of the leads said the trade profited from the quieter conditions after a much busier earlier half of the week, with four issuers having hit the market on Monday, five on Tuesday and two yesterday (Wednesday).

“Day by day, the level of activity has obviously been a bit mind-blowing,” he said. “Today, this trade got the market to itself.”

After announcing the mandate yesterday afternoon, leads Credit Suisse, Danske, Goldman Sachs and SG this morning went out with guidance of the mid-swaps plus 10bp area for the 10 year euro benchmark-sized obligations de financement de l’habitat transaction. After around an hour and a half, books were reported as being over €1.5bn, excluding €90m joint lead manager interest. The spread was ultimately set at 6bp, and the deal sized at €1.25bn, on the back of orders over €2bn, excluding €90m JLM interest.

A syndicate banker at one of the leads said the deal went extremely well, with it tightening by 4bp and pricing at around flat to fair value, based on its outstanding 2029 paper trading at plus 5bp.

“If you adjust for the curve, you’re talking fair value at around 5.5bp-6bp,” he said, “so zero to half a basis point of NIP at the most.”

He said the healthily oversubscribed book comprised a good mix of accounts, demonstrating the overall strength of the market.

“You can get pretty much any tenor away in this market,” he said.

“This issuer usually only issues about twice a year,” he added, “and as a top tier credit, it’s a name you don’t really want to miss.”

Another lead syndicate banker said the result was on par with the most competitive prints seen this year, with minimal to zero new issue premium.

“You can always argue whether the curve is flat between the two maturity points,” he said, “but nonetheless, in this context, it was a very strong deal from a well established name.”

He said bank treasuries took the largest share of the book, reflecting similar allocations in a spate of recent trades.

“They’ve been very actively involved this year,” he said, “which was not quite the case last year given this kind of maturity spectrum, but now they’re partaking at the longer end, which is helping to create momentum.”

He added that while Eurosystem demand helps, transactions would still be capable of performing without it, further demonstrating the strength of the asset class.

Syndicate bankers said that next week the market is unlikely to see as much issuance as this week, with some issuers either in or approaching blackout periods.

“There will be ongoing supply,” said one, “but most likely not as vibrant as it was this and last week.”

NordLB Luxembourg Covered Bond Bank (NordLB CBB) today re-announced plans for the first ever legislative renewable energy covered bond, a €300m no-grow five year transaction, with a view to launching it as early as next week.

A mandate for the planned inaugural issue was initially announced in October, but NordLB CBB then held off launching the deal. It is now set to follow in the wake of Moody’s on Monday upgrading its provisional rating of the covered bonds from Aa3 to Aa2.

ABN Amro, Commerzbank, Crédit Agricole and NordLB have the mandate.