Good demand for a Caisse de Refinancement de l’Habitat 10 year benchmark today (Wednesday) on the back of a successful deal yesterday from Société Générale SFH showed the market to be receptive to high quality issuers, said market participants. Meanwhile, Credit Suisse took some $4bn of orders for a dollar debut.

CRH leads Barclays Capital, Crédit Agricole, HSBC, Natixis and SG built a book north of Eu2.5bn between 0800 GMT and 0830 GMT after going out with a whisper yesterday in the high 60s and taking Eu1bn of indications of interest. After opening at the books this morning with official guidance of the 65bp area, CRH fixed its pricing at 63bp over mid-swaps.

“It went extremely well,” said a syndicate official from one of the leads. “We had about 83 different investors, which is good for a trade at the long end.”

He added that the buyers were mainly from France and Germany.

The pricing was based on CRH’s curve, according to the lead syndicate official, with comparables including a January 2021 at 59bp bid and a September 2022 at 60bp bid.

“We paid a very limited new issuer premium,” said the banker from one of the leads.

A syndicate official away from the leads thought the initial pricing was very generous, “considering everyone is looking for quality paper”.

But when the pricing was tightened to 63bp over, he said it became expensive compared to the January 2021.

“There’s hardly any new issue premium on that one now” said the syndicate official, “but fair enough, because when you do 10 years, it’s the coupon that’s more of a concern.”

Another syndicate official away from the leads called CRH a “fantastic” transaction.

“Given how much yields have fallen, it’s a very credible result,” he said, adding that there could be a point when investors hold off buying 10 year paper because yields will have fallen so much.

“In late August 2010” he said, “spreads plummeted and we saw a lot of investors reluctant to put their money to work, but these deals prove that this is not the case now.”

Société Générale SFH launched its Eu1.5bn five year obligations à l’habitat yesterday (Tuesday) following pre-sounding on Monday afternoon and a pan-European roadshow last week. The deal was priced at 43bp over mid-swaps by leads BBVA, Crédit Agricole, ING, SG and UniCredit.

“The feedback was very good,” said Ralf Grossmann, head of covered bond origination at SG. “Investors were comfortable with the name, structure and collateral.

“The assets are securitisation notes, which however have a double recourse to SG and the cover pool, so they are more like covered bonds than securitisations,” he added.

The order book totalled Eu3.7bn, comprising 150 accounts. Germany and Austria were allocated 32%, France 18%, Nordics 11%, the UK/Ireland 10%, Asia 8%, the Benelux 7%, Italy 4%, Switzerland 3%, Iberia 1%, and others 6%. Banks took 39%, fund managers 35%, central banks 13%, insurance companies 8%, pension funds 4%, and others 1%.

Both the new covered bond programme created using the SFH legislation and issuance off SG SCF’s obligations foncières programme will continue to be used by the French bank, said Grossmann.

“They’re entirely different animals,” he said.

Credit Suisse priced its debut dollar covered bond benchmark yesterday (Tuesday). The $1bn five year issue was priced at 96bp over US Treasuries by leads BNP Paribas, Credit Suisse, Deutsche Bank, HSBC and RBS.

The pricing equated to 60bp over mid-swaps, 2bp inside where Norway’s SpareBank 1 Boligkreditt priced a $1.25bn five year on Monday.

The leads are understood to have built a book of some $4bn comprising well over 100 orders. Roughly two-thirds of the bonds were sold into the US, with the balance going into Asia and Europe.