Tour Dexia, Brussels (detail)

Dexia Municipal Agency was more than twice oversubscribed on a Eu1bn no-grow five year benchmark launched this (Wednesday) morning that bankers away from the leads said was a great result. Meanwhile, WL Bank issued a Eu1bn Pfandbrief and Credit Suisse began preparations for a dollar debut.

Leads Dexia Capital Markets, ING, Morgan Stanley, Natixis and Nomura are set to price Dexia Municipal Agency’s deal at 91bp over mid-swaps this afternoon, after having started to take indications of interest at the mid-90s area this morning and eventually built a book of more than Eu2bn.

“It’s a great success for them,” said a syndicate official away from the leads. “It’s a name that can prove difficult in terms of line availability, and it has become a bit of a higher beta name that tends to underperform when the markets are tricky.

“Obviously they wanted to get their plans out early to get a bit of feedback, and to get a Eu1bn deal at that level is a very good result.”

Another syndicate official agreed.

“It’s a great deal,” he said. “The guidance of 93bp might look cheap, but it is where it should come. We were showing them the 90bp area last week, which was pre-Greece, so the eventual guidance looks OK.

“It’s expensive from an issuer perspective,” he added, “but it reflects where secondaries are.”

Ahead of the new issue, Dexia MA’s outstanding 2016 paper was said to be in the high 80s over mid-swaps.

The syndicate official said that limiting the deal size to Eu1bn made sense even if the order book was more than Eu2bn.

“They are not taking everything off the table,” he said. “They will be back before the end of the year, so that was the right strategy.”

Dexia Municipal Agency’s last obligations foncières benchmark was a Eu1bn 10 year at 100bp over mid-swaps in January.

A banker at one of the leads described the transaction as a blow-out.

“We were all kind of positive around the five year maturity, especially given that there was little supply in the market this week,” he said. “But none of us actually saw this coming.”

The leads began taking indications of interest at around 0830 London time this morning at a whisper of the mid-90s over, then tightened this to a 93bp-95bp range after building a shadow order book of around Eu1.5bn. The leads then opened books officially with guidance of the 93bp area, before moving to the final 91bp re-offer.

The lead banker said that the issue was announced on Monday because it was not clear what else might be planned for this week, and because it ensured that investors would focus on the project. However, the exact timing of the issue was left open given that Dexia was due to announce results this morning.

“None of us had a view as to what the results of the group might be”, he said, “although they contained nothing overly surprising so they had no effect on this trade.”

Westfälische Landschaft Bodenkreditbank (WL Bank) priced its five year Eu1bn mortgage Pfandbrief at 11bp over mid-swaps, the tight end of initial guidance of the 12bp over mid-swaps area.

A banker away from the leads said the deal went well.

“It’s always safe with them,” he said. “It’s a rare name and it’s German, so obviously it was going to get bought up by German investors.”

Leads Barclays Capital, BayernLB, Deutsche Bank, DZ Bank and NordLB built a book of over Eu1.25bn between 0900 and 1120 CET.

“Bookbuilding went very quickly,” said a banker at one of the leads. “Otherwise, we wouldn’t have closed books so easily.

“With the pricing, we looked at more recent trades out of Germany because there’s not that much outstanding from WL Bank. We looked at Münchener Hypothekenbank, thinking WL Bank would offer a little more than you’d expect from a five year Münchener Hyp.”

Another banker at the leads said German investors bought up most of the trade.

“Germany is fairly dominant, but you would have expected that anyway,” he said.

Credit Suisse is planning to hold a roadshow ahead of launching its first dollar benchmark covered bond.