MMB SCF drew over €2.3bn of demand to its third euro benchmark today (Wednesday), a €500m will-not-grow 10 year transaction, and syndicate bankers said the high level of demand relative to its first two transactions was attributable to strong marketing and a receptive market.

After a mandate announcement on Monday followed by investor calls, My Money Bank SCF (MMB SCF) leads BNP Paribas, Crédit Agricole, DekaBank, DZ, HSBC and Natixis this morning went this morning out with guidance of the mid-swaps plus 24bp area for a €500m will-not-grow 10 year covered bond. After around 40 minutes, books were reported as being over €1bn, and after around two hours, guidance was revised to the 20bp area on the back of over €2bn demand, excluding joint lead manager interest. It was ultimately priced at 18bp, on the back of over €2.3bn of orders, excluding JLM interest.

MMB SCF is the covered bond issuer of My Money Bank, a French bank established from the former GE Money Bank in 2017. The new issue is its third euro benchmark, following €500m deals in 2018 and 2019, respectively, with today’s achieving its largest order book by a significant margin.

A syndicate banker away from the leads said it represented a solid outcome for the issuer, with the popular 10 year maturity and decent spread proving an easy choice for investors.

“It’s a bit of an odd name,” he said, “but it’s still an SCF out of France, and it’s a very good time in the market for a trade like this.”

He saw fair value at around 19bp, indicating a negative new issue premium of 1bp, based on the MMB SCF’s outstanding September 2029s trading at 17.5bp-18.5bp, a lead banker put fair value at 18bp-19bp.

“If you see its 2029 paper at 18bp, you’d probably put fair value for its 10 year at 19bp and it would be 1bp through” said the lead banker, “but if you make it 17.5bp and the curve is flat it’s probably 18bp – it depends on your perspective.”

The spread of 18bp offered a double-digit pick-up over where more established French credits trade – the most recent 10 year French benchmark, a €1.25bn 10 year from Compagnie de Financement Foncier, for example, was launched at 7bp over mid-swaps on 17 September and was on Monday trading at 5.5bp, mid, according to pre-announcement comparables circulated by MMB SCF’s leads.

The lead banker said MMB SCF’s success is in line with the current trend of well-subscribed order books for euro benchmarks, and that today was very well diversified.

“This shows the issuer made good progress in marketing its name to the broader public,” he added, “and I very much believe they deserve the success, so all smiles.”

Another lead banker said that on top of its strong marketing efforts, MMB SCF had benefited from coming to an undersupplied market with cash rich investors.

“They’ve dotted all the i’s and crossed the t’s with a sensible marketing campaign,” he said.

Moreover, a third reference point in its curve gives the issuer a more established presence in the market, he added.

“Consequently this one has absolutely flown,” he said. “It’s their biggest book by far and a remarkably pleasing transaction.”