BPCE SFH today (Tuesday) met with stronger demand than the last CBPP3-eligible benchmark, for Axa Bank Europe SCF on Thursday, attracting over €1.35bn of orders to a €1bn five year deal, with lead bankers highlighting encouraging broad investor participation in the French trade.

After announcing the mandate this morning, BPCE leads Banca IMI, BBVA, DekaBank, Helaba, HSBC, ING, Natixis and UniCredit went out with guidance of the mid-swaps plus 40bp area for a five year euro benchmark-sized obligations de financement de l’habitat. After around two hours and 10 minutes, books were reported as being over €1.1bn, and after around three hours and five minutes, the spread was set at 40bp and the deal size at €1bn, on the back of over €1.2bn of demand, excluding joint lead manager interest, with over €1.35bn of demand ultimately good at re-offer.

Syndicate bankers at the leads said the deal went well considering the circumstances and fared much better than a €500m four and a half year print from Axa Bank Europe SCF on Thursday, with BPCE’s final book twice the size of its peer’s, which was priced 2bp tighter, at 38bp, over following guidance of 35bp-40bp.

“Over 55 investors is a decent pick-up on some recent trades,” said one, “and hopefully an indication that people are getting used to working from home. Furthermore, it was also a busy day across corporates, financials and SSAs.

“Investors clearly have got money to put to work. The cash is flowing – you’ve just got to come with the right new issue premium and you can get really good trades done.”

Another lead banker said that given the volatility of yesterday’s trading session, as well as the competition faced from German states and SSAs, the deal went “quite OK”.

“There is some relative value being offered versus covered bonds at the moment,” he said. “German Länder, for instance, are printing decent sizes and are not tightening the spread compared to the IPTs, so I think today we can be pleased with the outcome.”

He added that there was a marked increase in the number of asset managers in the book versus recent transactions.

“They were a bit absent from the deals last week,” he said, “which is quite interesting.”

A third lead banker said the issuer was well-suited to re-establishing the curve for core European issuers after heavy Canadian supply last week, as Axa Bank Europe SCF’s profile did not appear to have proven appropriate for some investors.

“We had very good participation from all the main European investors,” he added, “including French, German and Italian accounts.”

A syndicate banker away from the leads, however, said the deal might not have wholly fulfilled the issuer’s ambitions, considering that pricing was not tightened from the 40bp guidance and the time it took to announce the final terms. He said that even though BPCE’s trade improved upon Axa’s, current execution outcomes leave much to be desired.

“But perhaps this is the new normal,” he added, “for the time being at least.”

And he said getting a deal finished deserved some credit in itself, as European markets continued to suffer volatile movements amid the coronavirus crisis, albeit with sentiment better in equity and credit markets today.

“Whereas corporates are almost back to normal levels,” he said, “for the financial stuff, to get the level of oversubscription they did was OK.”

One of the lead bankers that the approach taken to pricing was sensible in light of investor sentiment and in line with the lack of pricing movement during execution in last week’s supply.