Further new issues are being eyed for early next week after CFF yesterday unblocked the euro benchmark covered bond market with a €500m long five year social debut that attracted over €3.1bn of orders, while Kookmin secured a “solid” result with a €500m three-and-a-half year.

The new euro benchmark supply is the first in the primary market since Slovakia’s Prima banka sold a €500m two year on Wednesday of last week (27 September).

Following a mandate announcement on Monday and marketing until Wednesday, leads ABN Amro, BayernLB, Natixis, Nordea, Scotiabank and UniCredit yesterday morning opened books for Compagnie de Financement Foncier’s €500m no-grow January 2029 inaugural social obligations foncières, expected ratings triple-A, with initial guidance of the mid-swaps plus 40bp area. After around three-quarters of an hour, the leads reported books above €1.5bn, excluding joint lead manager interest, and after around an hour and 40 minutes, they revised guidance to 34bp+/-2bp, will price in range, on the back off books above €3.25bn. The €500m deal was ultimately priced at 32bp on the back of a book above €3.1bn at final terms.

Syndicate bankers at and away from the leads welcomed the success of the fresh supply.

“It was a positive sign,” said a banker away from the leads. “They did a virtual roadshow and got enough investors interested in such a trade, and then they put a very nice premium on it, which was what the market expected – we calculated it at 12bp versus the secondary market at the start – and that really made it work.

“It’s an issuer that everyone is familiar with,” he added, “a good name, a good product, and it was €500m no-grow – all these boxes were ticked, so a very nice trade in the end.”

Another said the deal confirmed hopes that appropriate trades are still feasible in spite of the difficult backdrop.

“It’s a very good trade for the market, because the market has been unblocked,” he said. “It confirms that the liquidity and the market depth is there – but honestly we didn’t really doubt this.”

However, the syndicate banker felt the 40bp initial guidance was unnecessarily generous and ultimately played into another remarking wider of triple-A products, which had already been hit by a modest response to a EFSF trade on Wednesday.

“When you combine both, French, German, Nordics are again 2bp-4bp wider,” he said.

Other bankers nevertheless agreed with the approach taken by the leads.

“They had to be successful,” said one. “And when you’re structuring a new social programme like this, you don’t want to end up with a book that is shy of €600m or something like that. That premium was necessary to ensure success.”

South Korea’s Kookmin Bank had also announced its mandate on Monday, and yesterday morning leads BNP Paribas, Commerzbank, Crédit Agricole, HSBC, ING and SG opened books with guidance of the mid-swaps plus 58bp area for the €500m (KRW711bn) April 2027 covered bond, expected ratings triple-A. After a little over an hour and 50 minutes, they reported books in excess of €650m, excluding JLM interest, and after around two hours, they set the spread at 55bp on the back of books above €750m, with the final order book reported at more than €925m.

“Kookmin is a different animal and they did a good job,” said a banker away from the leads. “They set the pricing on the back of a €750m book and that is in line with market expectations – it’s not an issuer who normally has a €2bn book – and they were able to tighten a few basis points, so a nice and solid trade.”

A lead banker said the result was positive given the relatively limited investor base for South Korean product, and especially with Korea Housing Finance Corporation having sold a €1bn four year just a fortnight ago.

“And this year we are rethinking the definition of success,” he added.

Syndicate bankers said further supply could emerge next week after yesterday’s trades had demonstrated a window of opportunity, with several issuers monitoring the market.