ING attracted over €2.25bn of demand to a rare Dutch three year covered bond today (Monday), allowing it to take €1.75bn out of the market, with OP Mortgage Bank and Crédit Agricole venturing progressively further along the curve and achieving €1bn trades.

ING leads Barclays, BBVA, Crédit Agricole, DZ, ING, Natixis and UniCredit opened books for the benchmark-sized November 2025 issue, expected ratings triple-A, with guidance of the mid-swaps plus 6bp area. After a little over two hours, they reported books above €1.5bn, excluding joint lead manager interest, and after around two-and-a-quarter hours, they set the spread at 3bp on the back of orders above €1.9bn. The size was then set at €1.75bn with books above €2.1bn, and the final book good at re-offer was over €2.25bn, excluding JLM interest.

The three year maturity is near unprecedented for a Dutch issuer, although since the beginning of October the two and three year part of the covered bond market has seen a busiest period, with nine benchmarks shorter than four years.

“The outperformer of the day was ING,” said a syndicate banker at one of the leads. “The scarcity around the tenor for a Dutch name certainly ticked a very important box in terms of being appealing to investors. So we saw a very high level of granularity and a very strong response, mainly driven by bank treasury, LCR portfolios, or here and there some very specific asset managers happy to park money at the short end but still getting a very high coupon for the instrument.

“With these yields, the shorter, the better,” he added. “We have observed a significant drop in outright rates over the last couple of days and weeks, but still, everything being equal, it remains extremely interesting for asset managers to buy covered bonds. And issuers are happy to keep it short because of the spread levels they would lock into at five years and longer – the curve is very steep between three and five years.”

The strong demand allowed ING to tighten pricing from mid-swaps plus 5bp to plus 2bp, resulting in a new issue premium of around 5bp – the leads put fair value at around minus 3bp, citing pre-announcement comparables including ING February 2027s and April 2028s at minus 1bp, as well as ABN Amro January 2026s at minus 6bp and Rabobank April 2026s at minus 4bp.

“That translates into a pretty strong transaction these days,” said another lead banker. “Add-in the order book size and a €1.75bn print in three years, it couldn’t be much better, to be honest, at this time of year after €200bn of supply.

“It’s one of the biggest Eurozone trades of the year and they could have done more, given the size of the order book.”

Finland’s OP Mortgage Bank also targeted the short end this morning, with a long three year benchmark. Leads Crédit Agricole, Deutsche, DZ, Nomura and OP went out with guidance of the mid-swaps plus 8bp area for the June 2026 issue, expected rating Aaa. After almost two-and-a-half hours, they reported books above €1bn, and the deal was ultimately priced at 6bp and sized at €1.25bn on the back of a final €1.4bn order book.

“Given how things stand, it being November, and shorter dated supply having been all over this market for the last few trading sessions, it’s definitely a good result,” said a lead syndicate banker, “and both the issuer and ourselves are happy with what they achieved.”

He put the new issue premium at 6bp, citing fair value of mid-swaps minus 2bp. According to pre-announcement comparables circulated by the leads, OP September 2025s were quoted at minus 5bp, and its November 2026s and June 2027s at minus 2bp.

Crédit Agricole Home Loan SFH issued the longest benchmark of the day, a €1bn five-and-a-half year deal priced at plus 15bp on the back of a peak book above €1.4bn and a final book above €1.3bn, following guidance of the 17bp area. A lead banker put fair value at 10bp-11bp over.

The deal is the third from France in the five year part of the curve, following issues for CFF and Caffil last week, and period of regular supply from the country. A banker said that although today’s deal achieved a solid result, the outcome was tempered by a degree of fatigue among investors, with the maturity no longer their favourite and some closing books for the year.

However, syndicate bankers said today was a sensible day to issue, with fixed income markets having been boosted by weaker than expected US CPI figures on Thursday, and ahead of a new EU issue tomorrow (Tuesday). One noted that the strength of the credit markets was evinced by a dual-tranche ABN Amro senior non-preferred issue today that attracted aggregate demand approaching €6bn.

“It’s fair to say that the covered bond market might be less dynamic at this point in time, but look at the spreads!” he said, noting that ABN Amro’s €1.25bn green long seven year was priced at mid-swaps plus 145bp and its €1bn 12 year at plus 165bp.

“The gap between secured and unsecured funding is absolutely massive,” he added, “so the bottom line is that the covered bond market is still providing reliable results.”

In sterling, Lloyds Bank has mandated a five Sonia benchmark set for launch tomorrow after compatriot Barclays last Tuesday reopened the UK market. The bank has mandated BMO, HSBC, Standard Chartered and TD as bookrunners alongside Lloyds itself.