French covered bond issuers sate demand at the long end
The public sector-owned French covered bond issuers, Caffil and La Banque Postale, returned to the covered bond market to issue two of the three 10 year deals seen this week. The deals were comfortably oversubscribed and provided exceptionally cheap funding for both issuers.
At its final spread of 28bp over mid-swaps, La Banque Postale’s transaction looked generous relative to other outstanding deals in the secondary market but was in fact the cheapest primary funding for any French 10 year since February 2008.
At 36bp over mid-swaps, Caffil was unable to match that
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