Crédit Agricole sold its second benchmark of the year today (Tuesday), with the €1.75bn long five year issue leaving it almost done for the year in covered bonds, while SEB yesterday sold the largest Swedish euro benchmark in years, and Hamburger Sparkasse has mandated a €500m five year.

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Crédit Agricole Home Loan SFH’s new issue comes after a €1.25bn 11 year on 18 January, and according to a banker at one of its leads, the French bank is all but done for the year on covered bonds and has completed more than 60% of its overall funding programme.

“There is no upside in waiting,” he said.

The deal was announced this morning, leads Crédit Agricole, Commerzbank, DZ, LBBW, Natixis and TD going out with initial guidance of the mid-swaps plus 8bp area for the August 2027 euro benchmark obligations de financement de l’habitat, expected ratings triple-A. After around an hour and 25 minutes, they reported books above €1.25bn, and after around two hours and 25 minutes, they set the spread at 4bp for a €1.5bn-€1.75bn size on the back of books above €2.5bn. The new issue was ultimately sized at €1.75bn on the back of a final book of more than €2.6bn.

“It was a very good trade,” said the lead syndicate banker. “We went for size from the outset otherwise we would have started tighter. The issuer’s target was €1.75bn and we delivered that at the tightest possible price for the size.”

According to pre-announcement comparables circulated by the leads, Crédit Agricole’s May 2027s and December 2028s were quoted at plus 1bp on an i-spread basis, and its November 2028s at plus 2bp, and he put the new issue premium at around 3bp.

Execution was straightforward, according to the lead banker, in spite of ongoing macroeconomic concerns, most recently even more hawkish comments from Federal Reserve chair Jerome Powell yesterday (Monday). He suggested market participants have been learning to live with the rates volatility and also the conflict in Ukraine.

“We saw nothing today different from what we have seen this year on the five year part of the curve,” said the lead banker. “Liquidity is there, the market is very well bid, and for the time being it’s business as usual for the covered bond business.

“Quality accounts were involved in good size today,” he added. “Investors we have not seen for quite some time are increasingly present in order books, particularly on the five year part of the curve with a decent yield and relative value on offer.”

Today’s deal comes after Skandinaviska Enskilda Banken (SEB) yesterday issued the largest Swedish euro benchmark covered bond in years, a €1.5bn (SEK15.7bn) five year. Leads Deutsche, Natixis, Nomura, SEB and SG priced the new issue at mid-swaps plus 5bp, following initial guidance of the 9bp area and on the back of some €2.25bn of demand.

Only three Swedish euro benchmarks totalling €2.5bn were launched last year, and only one, for €1bn, in 2020, and a syndicate banker away from the leads said the rarity and diversification offered by the new issue contributed to the strength of demand.

“The deal made perfect sense,” he said. “We’ve already seen it’s possible to take good volume out of the market and thumbs up to SEB for doing so without paying an excessive new issue premium – it’s almost come at the French.”

Hamburger Sparkasse is expected next, after a mandate announcement today for a €500m no-grow five year mortgage Pfandbrief via BayernLB, Commerzbank, DekaBank, Hamburger Sparkasse and UniCredit. The issuer’s February 2028s were quoted at plus 2.5bp, mid, according to pre-announcement comparables circulated by the leads.