Investors rushed to buy Credit Mutuel Arkea’s 10 year covered bond on Friday and lock in the positive yield before it disappears, probably in a matter of weeks. Strong demand was all the more remarkable given the bank’s Aa3 rating could be downgraded by three notches.
The €500m Aaa/---/AAA rated covered bond attracted almost 100 orders totalling over €2bn, and was priced with zero new issue concession at 6bp over mid-swaps from an initial spread of 11bp and an interim spread of 7bp. Lead managers on the deal were Crédit Agricole
, CM Arkea,