Societe Generale could successfully take €1.25bn of seven year funding out of the market today (Monday), albeit with a new issue premium in line with higher levels seen last week, while Bausparkasse Wüstenrot has mandated a €300m eight year sub-benchmark, due tomorrow.

Societe Generale SFH leads Crédit Agricole, Danske, Erste, Mediobanca, Nordea, Scotiabank and SG announced the new issue this morning and opened books with initial guidance of the mid-swaps plus 4bp area for the February 2029 euro benchmark-sized obligations de financement de l’habitat, expected ratings triple-A. After about an hour and a half, they reported books above €1.25bn, including €50m in joint lead manager interest. After two hours and 35 minutes, they set the spread at plus 1bp on the back of books over €1.4bn, excluding JLM interest, and ultimately set the size at €1.25bn on the back of demand over €1.6bn, including €50m in JLM interest, good at re-offer.

“It was a solid, respectable trade,” said a lead banker. “There’s obviously not the same pool as for four or five years, as we saw with some of the larger trades last week, but I think we found it building all through the morning very well.

“The issuer was able to take a little bit of size as well and move the price accordingly – if you follow a strategy where you want to take some size out of the market, then you simply have to prepare to leave a little bit more on the table.”

Lead bankers put fair value at minus 1.5bp, implying a new issue premium of 2.5bp, although one noted that green points on SG’s curve make calculating fair value for the non-green bond less straightforward, and a banker away from the lead saw it closer to 3bp. According to pre-announcement comparables circulated by the leads, SG’s last euro benchmark, a €1.5bn five year green bond issued in December, was trading at minus 5bp, mid, its January 2027s at minus 2.5bp, and four issues from October 2027 to October 2029 – the latter priced in October – were at minus 2bp.

“They left something like 2bp-3bp on the table, which is quite something, given what we experienced earlier this year,” said the banker away from leads. “But I think it surprised no one, given that last week already indicated that this market is probably a little overstretched and deserves a break, to some extent.

“Upon fixing at 1bp, I would have expected a little more in terms of follow-up dynamics in their book,” he added. “But, they made the most out of it.”

A lead banker nevertheless contrasted the smooth execution with the wider backdrop.

“It’s yet another sign that the covered bond market is pretty isolated from the macro risks that we are seeing, because it’s obviously quite soft today on screens, but covereds are still showing resilience.”

Bausparkasse Wüstenrot is planning a €300m no-grow eight year Austrian mortgage covered bond, with DZ, Erste, RBI and UniCredit as joint leads, according to a mandate announcement today (Monday).

“They are a traditional sub-benchmark issuer,” said a banker at the leads. “It excludes a couple of investors who need €500m minimum, but I will presume there should be enough interest and support for this.

“Eight years is a good maturity and we are confident that we will make it work.”

According to pre-announcement comparables circulated by the leads, Bausparkasse Wüstenrot’s €300m September 2028 issue was quoted at plus 3.5bp, mid, while Bawag’s €500m September 2029s were at minus 0.5bp and €750m September 2030s at mid-swaps flat.