BNP Paribas scored a second French success of the week today (Tuesday), attracting peak demand of some €2bn to a €500m three year covered bond and keeping its new issue premium negligible, while MünchenerHyp erred on the side of caution with a €500m follow-up to yesterday’s German supply.

BNP Paribas Home Loan SFH leads BMO, BNP Paribas, Commerzbank, Danske, DZ, KBC, Lloyds, Nordea, Rabobank, RBI, SEB and UniCredit opened books with guidance of the mid-swaps plus 28bp area for the €500m no-grow October 2027 obligations foncières, expected ratings AAA/AAA (S&P/Fitch). After close to two hours and 10 minutes, they reported books above €2bn, including €75m of joint lead manager interest, and set the spread at 22bp, with the final book some €1.7bn.

A syndicate banker at one of the leads put the new issue premium at around zero, demonstrating the success of the new issue alongside the order book.

“Without wanting to overstate it, BNP is a bit of a special case,” he said. “Everybody and his brother has lines for the name and they have lines available as the issuer is not so frequent.

“And it’s a very easy transaction to play in – its short and small, which is not classic BNP. Hence the high number of investors and the strong order book.”

The issuer’s last euro benchmark was in May 2023, a €1.5bn five year.

A lead banker said the modest fall in orders from peak to final book reflected the 6bp move from guidance to re-offer, but was comfortably manageable given the still 3.4 times cover ratio.

BNP Paribas’ new issue came after successful French supply yesterday, with CFF having attracted some €1.7bn of orders to a €500m five year social bond and achieved a new issue premium of around 1bp.

Münchener Hypothekenbank leads Barclays, DekaBank, Deutsche, DZ, Nordea and UBS opened books with guidance of the mid-swaps plus 32bp area for the €500m no-grow February 2031 green mortgage Pfandbrief issue, expected rating Aaa. After a first book update putting books above €750m, including €20m of JLM interest, the spread was set at 28bp on the back of books above €850m, with no shrinkage upon the final pricing, according to a syndicate banker at one of the leads.

“It was a really nice trade,” he said. “The issuer is very happy.”

The German deal came after a €500m no-grow four year public sector Pfandbrief from LBBW yesterday (Monday) was tightened from guidance of 26bp to a re-offer of 22bp, implying a new issue premium of around 3bp, with the one update putting orders above €650m and no further book size communicated.

“Bearing in mind LBBW yesterday, MünchenerHyp was very well advised not to take the last basis point,” said its lead banker, “and it made a big difference.”

He put fair value at 25bp. Pre-announcement comparables circulated by the leads when the deal was teed up yesterday afternoon put MünchenerHyp green April 2022s at 22bp, mid, green June 2023s at 23.2bp, and conventional July 2024s at 25.2bp.