The flurry of activity from French banks followed a strong performance for credit spreads towards the end of last week.
“We came in this morning with a pretty strong tone,” said a FIG syndicate banker away from the deals on Monday.
BPCE might have anticipated the day’s crowded market, as it announced on Friday its intention to sell a dual-tranche offering of non-preferred senior notes.
Natixis was the sole bookrunner for the deal, which include an eight year fixed rate portion and a five year floating rate note. Commerzbank, Erste Bank, KBC and UniCredit joined as lead managers.
The syndicate banks were able to sell the March 2026 tranche at 65bp over mid-swaps, following initial price thoughts of 80bp area and guidance of 65bp-68bp.
This compared with a trading level of 61bp for the issuer’s January 2028 bonds and 46bp for its January 2024s, as well as a bid quote of 59bp for a June 2026 bond from BNP Paribas.
Pricing for the March 2023 FRN was tightened by the leads from initial thoughts in the low 60bp area over three month Euribor to land at 50bp — through guidance of 50bp-53bp
BPCE had March 2022 floaters trading at 39bp on Monday, while its January 2023 FRN was quoted at 43bp.
A large combined order book of more than €3.85bn allowed the issuer to raise €750m for each tranche of debt. This was above the €500m that was expected initially.
Getting in early
The French issuer raised €750m of seven year debt at 58bp over mid-swaps in a self-led deal, from initial price thoughts of 70bp area and guidance of 60bp area. Books were last heard at over €1.3bn.
But BNP Paribas appeared to pay up to sell its third non-preferred bond of the year so far in euros.
The French bank had a November 2025 note trading at 53bp on Monday morning, tighter than the final pricing level of 58bp for the new March 2025 bond.
“Despite the fact that we’ve had a very healthy pipeline it looks like everything has got a decent enough following,” said the banker away from the deals. “I wouldn’t be surprised to see a reasonable secondary market performance.”
Both BNP Paribas and BPCE have been frontloading their issuance of senior bonds in 2018.
BNP Paribas had said that it is targeting €10bn of non-preferred senior issuance this year, but it has already raised €6.4bn, including Monday’s trade.
Also including Monday’s deals, BPCE has already raised €4.45bn of senior unsecured bonds in 2018 so far.
It sold a dual-tranche offering of non-preferred senior bonds in euros in January, as well as two tranches of ordinary senior debt in dollars.
Tricolore
HSBC France complete the trio of French bank deals at the beginning of the week, raising €1.25bn of five year fixed rate bonds at 20bp over mid-swaps.
HSBC was the sole lead manager for the deal, which carried initial price thoughts in the 30bp area. Orders were last heard at over €2.3bn.
HSBC France is rated Aa3/AA-/AA- and is 99% owned by HSBC’s operating company, HSBC Bank Plc.
The issuer had not been active in the European primary market since November 2015, according to GlobalCapital's priced deals database, when it sold €500m of five year green bonds.