Crédit Agricole sold the longest euro benchmark in almost four weeks yesterday (Wednesday), a €1.25bn seven-and-a-half year deal that extended the post-SVB/CS recovery after core Eurozone issuers had successfully re-entered the primary market earlier in the week.

Leads BayernLB, Crédit Agricole, ING, SEB and UniCredit opened books yesterday morning with initial guidance of the mid-swaps plus 30bp area for the euro benchmark-sized October 2030 Credit Agricole Home Loan SFH issue, expected ratings Aaa/AAA/AAA (Moody’s/S&P/Fitch). The spread was set at 28bp and the size at €1.25bn on the back of a book above €1.57bn, including €60m of joint lead manager interest.

The euro benchmark is the first beyond five years since a €750m nine year Caffil trade on 9 March, which was the last euro benchmark to hit the market before the collapse of SVB and emergency rescue of Credit Suisse contributed to a two-and-a-half week break in supply.

A lead banker said the issuer had been eyeing a five or seven year issue, with a view to pushing the envelope on duration, and the latest inflation data encouraged it to test the longer maturity. A €4.6bn book for a €1bn 20.25 year non-call 10.25 Tier 2 Axa issue, in which Crédit Agricole CIB participated as joint bookrunner, supported this stance.

“Our view was that resistance to duration should be diminishing,” said the lead banker. “It may be a slow process, but it should start now, because we know that the bulk of the rate hikes are behind us and investors should be more inclined to start loading up on duration.

“At the end of the day, it was a good result,” he added. “I’m very happy with €1.25bn seven-and-a-half years at 28bp.”

Demand was off the €4.65bn high enjoyed by compatriot BPCE for a €2bn five year on Tuesday, although bankers pointed to not just the duration of Crédit Agricole’s trade, but also the pricing – whereas BPCE started at a level implying a new issue premium of around 8bp, and tightened 4bp, Crédit Agricole’s initial guidance implied a pick-up of around 6bp, with both landing at new issue premiums of around 4bp.

The lead banker suggested that while the maturity choice had proven completely viable, trades of 10 years or even longer might still be premature.

“But as we know,” he added, “the market can turn around completely and rapidly, so this might not be the case next week.”

After non-Eurozone issuers had reopened the euro benchmark market last week, BPCE alongside DZ Hyp had on Tuesday issued the first core-Eurozone trades, with the German issuing a €500m four-and-a-half year public sector Pfandbrief that attracted some €2.6bn of demand, allowing pricing to be tightened from 8bp to 3bp over mid-swaps.

They were joined by Slovakia’s VUB, which sold a €500m three year priced at 55bp, 2bp inside initial guidance, equivalent to a new issue premium of around 14bp, on the back of some €715m of demand.

“After a period of volatility, it’s not necessarily the name you would count among the first movers,” said a lead banker, “but to some extent, they were, and I think this deserves credit. We had a solidly subscribed book and I believe the issuer was happy with the outcome.”

Erste rounded off the week’s issuance yesterday, selling a €1bn four-and-a-half year at mid-swaps plus 20bp on the back of some €1.5bn of demand, tightening 4bp from initial guidance to achieve a new issue premium of 4bp-5bp.