Lead managers Commerzbank, Crédit Agricole, Goldman Sachs and Royal Bank of Scotland closed books just short of €1.7bn on the deal, which had been held back for months this year by the legal complexity of having the guarantee of Belgium (51.4%), France (45.6%) and Luxembourg (3%).
The leads guided investors to 30bp area over the interpolated Belgian government curve on Tuesday morning, and the final spread was set at 30bp over. That equated to 24.7bp over mid-swaps.
“There aren’t many Belgian agencies that are very active in the capital markets, so for relative value discussions we looked at the type of spread agencies like Cades and Unédic can pay versus the French government curve,” said a banker who worked on the deal.
Comparable agencies, such as Cades, typically trade 15bp-20bp back of their sovereign curves, said a rival syndicator, but Dexia had paid a new issue premium appropriate for an uncertain market.
The unique credit had drawn a mix of accounts, said the lead manager, with even typical covered bond investors joining in an order book that showed a good split between pure SSA and pure credit buyers.
The bookbuild benefitted from two surges of interest on Tuesday morning, he said.
“First, we had the pure SSA buyers coming in, then we had a nice add-on from people looking at it from a pure credit perspective, many of them from the UK.”
That split momentum was reflected in the allocations.
UK buyers’ 28% came in just short of France at 29%, followed by Germany (18%), Switzerland (6%), Nordics (5%) and Benelux (4%).
Asset managers took 58% of the bonds, followed by bank treasuries with 31% and official institutions with 11%.