Axa pushes covered bonds longer with 20 year

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By Bill Thornhill
28 May 2020

Axa Bank SCF became the first bank since February to issue a 20 year covered bond — showing investors' growing appetite for risk. It also offered encouragement to eurozone issuers with long term funding needs to return to the market — especially given the strong performance of deals eligible for the ECB's purchase programmes compared with those that are not.

After mandating leads on Wednesday, Axa opened order books on Thursday for a €500m no-grow 20 year due June 2040 with initial price guidance of 28bp over mid-swaps. 

At that spread the deal offered a pick-up versus the issuer’s recently tapped 1.275% April 2033s, which were indicated around 12bp ...

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