Crédit Agricole Public Sector SCF is expected with a rare, €500m 10 year deal tomorrow (Thursday), after “fantastic” €1.5bn trades for Rabobank and SG yesterday, with the Dutch bank successfully testing the long end and the French achieving the biggest book of the year inside fair value with green fives.

After Societe Generale SFH’s deal was announced on Monday, leads ABN Amro, Danske, ING, LBBW, Santander and global coordinator Societe Generale yesterday (Tuesday) morning opened books with initial guidance of the mid-swaps plus 2bp area for the December 2026 euro benchmark-sized “positive impact” covered bond, expected ratings triple-A. After around 40 minutes, the leads reported books above €1.5bn, excluding joint lead manager interest, and after around two hours, they set the spread at minus 3bp for an expected size of €1.25bn-€1.5bn on the back of more than €4bn of demand. The deal was ultimately sized at €1.5bn, with the final book at €4.2bn, pre-reconciliation, and containing over 100 accounts.

The order book is the biggest for a euro benchmark this year and the issuer was also able to achieve pricing 1bp inside fair value, according to bankers at and away from the leads – according to pre-announcement comparables circulated by the leads, SG June 2025s were quoted at minus 3bp, mid, and its 2026 to 2029 paper all at minus 2bp, including green July 2029s.

A syndicate banker at one of the leads said that while they had been expecting a successful transaction, it turned into a “bonanza”, with several factors working in its favour.

“Covered bonds are in general undersupplied,” he said, “and Danske already showed that five years is a total no-brainer for all investor types.”

Danske Mortgage Bank attracted a peak €2.5bn of orders to a €500m no-grow five year Finnish covered bond last Wednesday (17 November).

“Since then, relative value versus everything has only gotten better,” he added, “and swap rates are not even in deeply negative territory today. SG is a name literally everyone can buy, and asset managers are sitting on piles of cash.”

He said the green nature of the transaction also meant big investors could buy SG for both conventional and ESG portfolios, further boosting demand.

“The amount of triple-digit orders was amazing,” he said. “I haven’t seen that in a long time.

“Everything just came together.”

A Rabobank €1.5bn 10 year transaction also surprised to the upside, in successfully testing the long end of the curve with the first new euro benchmark of 10 years or longer since a €500m 10 year mortgage Pfandbrief for Bausparkasse Schwäbisch Hall on 21 October. In the interim, rates volatility has increased.

Leads Credit Suisse, Deutsche, Natixis, NatWest and Rabobank went out with initial guidance of the mid-swaps plus 5bp area and ultimately priced the €1.5bn December 2031 issue, rated triple-A, at plus 1bp, with the book reaching some €2.5bn. Bankers at and away from the leads put the new issue premium at zero to 0.5bp at most.

“Five years works, of course,” said a syndicate banker at one of the leads, “but 10 years was a little more untested. Rabobank is a name that always has a little je ne sais quoi about it and always fares better in tricky markets, and that was what we saw here.”

The trade is Rabobank’s first euro benchmark covered bond in just over a year, its last having been a €1bn 20 year on 19 November 2020, and the lead banker said rarity had played a role in the Dutch issuer’s success, as well as the receptions enjoyed by Danske and SG, and could potentially do so for Crédit Agricole Public Sector SCF tomorrow.

It is set to follow Rabobank into the 10 year maturity after a mandate announcement today, and the public sector issuance will be the French bank’s first since a €750m nine year trade in September 2019. Commerzbank, Helaba, IMI-Intesa Sanpaolo, LBBW and Natixis are joint bookrunners alongside global coordinator Crédit Agricole.

According to pre-announcement comparables circulated by the leads, CA Public Sector SCF October 2026s were quoted at mid-swaps flat, its August 2027s and September 2028s at plus 0.5bp, and its March 2029s at plus 1bp.

“Rabobank certainly left some orders unfilled,” said another syndicate banker away from the deal.

Bankers said some issuers are still eyeing the market, particularly after the recent successful transactions, with larger issuers potentially encouraged to accelerate funding plans ahead of the year-end slowdown.

“I wouldn’t be surprised if you see one or two issuers jumping into the market, maybe even some who have already been quite active this year,” said one. “If you see the conditions in the market now, and you want to avoid the January rush or possible uncertainty around the ECB meeting [on 16 December], this would seem to be good business.”