BPCE SFH today (Tuesday) launched the first and only euro benchmark so far this week, a €1.25bn long five year that attracted a bumper €4.3bn of orders, with the intermediate maturity and investor-friendly approach of the French issuer cited as factors in its success.

The new issue comes after Caffil restarted euro benchmark covered bond issuance last Thursday in the wake of weakness and volatility sparked by the Trump administration’s chaotic tariff onslaught, selling a €1bn green 10 year, with Caisse de Refinancement de l’Habitat (CRH) the only other issuer to have braved the primary market, issuing a €750m eight year on Friday.

BPCE SFH leads BBVA, Crédit Agricole, Danske, Natixis, NordLB and Rabobank opened books this morning with guidance of the mid-swaps plus 56bp area for a euro benchmark-sized July 2030 deal, expected ratings Aaa/AAA (Moody’s/S&P). After around an hour, they reported books above €2bn, and after around an hour and 50 minutes, the spread was set at 50bp and the size at €1.25bn on the back of books above €3.8bn, including €265m of joint lead manager interest. The final book was above €4.3bn, including JLM interest.

“From the outset and judging by all the relevant parameters, it was definitely the most successful of the three since Thursday,” said a syndicate banker away from the leads, “with the level of oversubscription particularly convincing. The book grew right up to the end, with another billion after the final terms were set.

“If you compare it to the other two French, it is basically the maturity doing the trick – fives are the easier sell versus eights and 10s.”

A syndicate banker at one of the leads agreed that the maturity was key to the deal’s success.

“The name is good,” he said, “but the tenor really helped. We knew that bank treasuries would be keener on this one than the longer dated paper, and that with the five year maturity and for a frequent issuer like BPCE this was by no means any kind of ‘test’, but it exceeded expectations with more than €4bn in the book.

“It’s the biggest book for a single-tranche deal in a couple of months.”

While a variety of financial institutions have been monitoring different parts of the secured and unsecured markets and generally declining to proceed after go/no-go calls, the market was considered sufficiently constructive for launch this morning, according to the lead banker – “not super-strong, but not falling out of bed, either.”

The leads put fair value at 47bp, implying a new issue premium of around 3bp.

“Could they have gone a basis point lower? I think they could, without jeopardising too much of the book, but they had this size and kind of target level in mind,” said the lead banker. “BPCE is a frequent player in the market, not known for squeezing the last basis point, and now everyone walks away from the trade with a good feeling.

“It has a big programme – even if less than last year – and will be back in the euro market later this year.”

The euro benchmark is only BPCE’s second of the year, following a €1.25bn long seven year in January, priced at mid-swaps plus 65bp. Its activity is down on last year, when it raised €4.75bn in the first two months of the year in two dual-tranche transactions, as part of an aggregate €7.25bn across 2024. Group member CFF has meanwhile raised €1.25bn year-to-date, in a dual-tranche deal in February, compared to €2bn by this time last year and €5bn across the whole of 2024.

Syndicate bankers said that, with many issuers in or entering blackouts, and the market still considered vulnerable to headlines, supply could remain subdued.

“If you’ve got €6bn or so to do over the year, you can’t be overly picky and if you’ve got a decent chance of getting a deal going, a couple of basis points either way isn’t going to rock the boat,” said one. “Others, who might be doing their calculations with, let’s say, sharper pencils, will wait on.

“But the market is apparently open and if you feel like doing a medium or short term maturity, you’ll stand a good chance of finding a home for your paper – the only question is whether it will be at the precise level you anticipated.”

Caisse de Refinancement de l’Habitat (CRH) tapped the market in between its compatriots on Friday, pricing its €750m eight year on the back of peak and final demand of some €1bn and paying a new issue premium of around 7bp after 2bp of tightening to a re-offer spread of 62bp.

A lead banker acknowledged that the deal had progressed relatively slowly, with the starting point deemed relatively tight to Caffil’s 10 year re-offer spread of 71bp, while renewed weakness mid-bookbuilding on the back of negative headlines also hit momentum.

“The issuer was nevertheless able to achieve the size target of €750m,” he added, “with a strong, quality order book and no drops at final terms.”