Crédit Mutuel attracted some €1.45bn of demand to a €1bn five year covered bond today (Tuesday), allowing it to achieve the upper end of its targeted size range, while Commerzbank opted for a tried and tested short-dated maturity, which Credit Suisse is also targeting for its return to the euro market.

Crédit Mutuel Home Loan SFH leads CIC, Citi, Commerzbank and Danske went out with initial guidance of the mid-swaps plus 20bp area for a euro benchmark-sized December 2027 transaction, expected ratings triple-A. After around two-and-a-half hours, they reported books above €1.1bn, excluding joint lead manager interest, and around 50 minutes later, they set the spread at 18bp on the back of more than €1.2bn of orders for an expected size of €750m-€1bn. The deal was ultimately sized at €1bn on the back of a €1.45bn final order book, pre-reconciliation and including €30m of JLM interest.

A banker at one of the leads said they were pleased to be able to achieve the upper end of the range targeted by the issuer from the outset, even if the five year maturity made for slower execution than Commerzbank’s three year.

“It seems that these days you need to do two or three year maturities to have deals take off within the first couple of hours of bookbuilding,” he said, “and printing a five year can seem like an achievement in itself.

“However, I would argue that it’s still a very acceptable maturity for most accounts,” he added, “but obviously the devil is in the detail, namely where do you see relative value? Quoting where secondary levels are trading is a bit of a misnomer, because they’re not really trading.”

According to pre-announcement comparables circulated by the leads, Crédit Mutuel March 2028s were seen at 11bp, mid, February 2028s at 12bp and July 2028s at 12bp, while a €1bn Crédit Agricole June 2028 deal priced at 15bp on 14 November was quoted at 15bp.

“Some might quote this as having a new issue concession of 6bp,” said the lead banker, “but I don’t think that makes sense here, and those spreads have widened. It’s a moot point, but if I were to put a number on it, I would probably say that it’s maybe 2bp-3bp of new issue concession.”

With year-end approaching and demand dropping off, investors need something to get them excited, he added. According to the lead banker, the new issue constituted pre-funding for 2023.

“The issuer – wisely, I think – was taking advantage of the fact that the market is still open, so why not take some chips off the table this year? Sure, we’ve been through some rough times in the second half and people may be feeling warm and fuzzy for the new year, but it won’t take much for us to see rates and spreads heading north again.”

Commerzbank priced its €1bn December 2025 mortgage Pfandbrief at 1bp over mid-swaps, via leads BBVA, BNP Paribas, Commerzbank, Erste and Mediobanca. The pricing is 1bp inside the level achieved by UniCredit Bank AG (HVB) on a €750m no-grow February 2026 mortgage Pfandbrief on Monday of last week (21 November).

Credit Suisse (Switzerland) is eyeing a first euro benchmark, with the bank having mandated Commerzbank, Credit Suisse, Danske, DZ, Helaba, ING and Natixis for investor meetings today and tomorrow, according to a mandate announcement this morning.

The Swiss bank has issued around CHF2bn (€2.04bn) of covered bonds domestically off its contractual programme, which is backed by Swiss residential mortgages and AAA rated by Fitch, since 2019. This supplanted an international programme under which Credit Suisse AG issued in euros and US dollars from 2010 to 2014, ahead of a restructuring of the group’s Swiss banking operations.

Last month Credit Suisse launched an any-and-all tender for the €600m July 2039 issue outstanding off the old programme. It announced last Tuesday that it had bought back just €32m of the paper.

A short-dated debut is under consideration. Among pre-announcement comparables circulated by the mandated banks were contractual covered bonds, including Sumitomo Mitsui Banking Corp of Japan’s November 2023s, seen at 19bp, mid, its September 2025s at 38bp, and June 2026s at 41bp, plus Deutsche Bank November 2024s at 12bp. Non-EEA covered bonds from Australia, South Korea and the UK were also listed, ranging from ANZ November 2024s at 12bp to Clydesdale (Virgin Money) June 2027s at 37bp and KHFC July 2026s at 50bp.