BBVA is out with a 10 year cédulas today (Thursday), taking Spanish covered bonds well beyond their previous longest maturity so far this year, after a 12 year OBG from Intesa yesterday. Meanwhile, Deutsche Kreditbank has mandated a Eu500m Pfandbrief for launch soon.

Leads Barclays, BBVA, Credit Agricole, Citi and Credit Suisse are taking orders for BBVA’s deal on the basis of guidance of the 230bp over area, having waited to open order books until after an auction of Spanish government bonds this morning.

The cédulas issue comes after 12 year obbligazioni bancarie garantite Intesa Sanpaolo and seven year senior unsecured Santander issues yesterday (Wednesday), which a syndicate banker on BBVA’s deal cited in relation to the bank’s decision to go ahead with a 10 year cédulas today.

“I think it’s about time,” he said. “We saw the Intesa 12 year transaction go exceptionally well and tighten around 5bp-7bp in the secondary market, and Santander doing a seven year senior unsecured transaction that went well, but wasn’t a blow-out.

“On the whole it seems like a right time to be looking at a 10 year Spanish covered bond.”

Banco Popular Español sold a Eu500m six year cédulas on Monday, which was the longest dated Spanish covered bond this year.

Intesa Sanpaolo’s 12 year OBG, for Eu1bn, was the longest dated covered bond issue from a southern European issuer since February 2011, when fellow Italian UniCredit launched a Eu1.25bn 12 year transaction.

Intesa’s OBG followed a US dollar dual tranche senior unsecured bond from the issuer on 8 January, with three and five year tranches attracting $11bn of orders for a total $3.5bn deal size. According to Intesa, the senior unsecured bond was the largest debt placement by an Italian financial issuer in the dollar market.

Its OBG also came only two months after Intesa sold another long dated covered bond transaction, a Eu1.25bn 10 year deal that was priced on 22 November.

A lead syndicate official said that with yesterday’s OBG Intesa for the third time in the last six months confirmed its high standing in the covered bond market, further distancing itself from peripheral names and “being able to enter in the elite club of issuers with the privilege to go beyond the 10 year tenor”.

Intesa said in a statement that the senior unsecured transaction and yesterday’s OBG, together with prefunding done at the end of 2012, cover its approximate total wholesale medium to long term maturities for 2013.

For yesterday’s 12 year covered bond, leads Banca IMI, Crédit Agricole, HSBC, RBS and UniCredit set initial price thoughts at the 160 over mid-swaps area and guidance at 155bp over before pricing the deal at 150bp over. The issuer said that at 150bp the OBGs came some 106bp through BTPs.

The order book reached Eu2.5bn in the first hour of bookbuilding and was closed at around Eu3.5bn. Some 149 accounts participated in the transaction, with 87% of the demand coming from foreign institutional investors, according to the issuer.

Insurance companies took the bulk of the bonds, with 52.5%, followed by fund managers with 32%, banks 10.5%, central banks 2.5%, pension funds 0.5%, and others 0.5%.

Germany and Austria were allocated 46%, France 24%, Italy 11%, Spain and Portugal 7%, the UK and Ireland 6%, China 3%, the Benelux 2%, and others 1%.

As The Covered Bond Report was going to press, Deutsche Kreditbank announced it has mandated Barclays, BayernLB, Deutsche, UniCredit and WGZ for a Eu500m no-grow five year public sector Pfandbrief. The deal comes after five year mortgage Pfandbriefe for Aareal Bank and Deutsche Hypothekenbank of Eu625m and Eu500m launched on Monday and Tuesday, respectively, which were re-offered at 1bp over mid-swaps.