Amount: €2bn social bond
Maturity: 25 May, 2036
Issue/reoffer price: 99.657
Spread at reoffer: 10bp over the May 2036 OAT
Launch date: Wednesday, June 16
Payment date: June 23
Joint books: Commerzbank, Goldman Sachs, NatWest Markets, Nomura, Société Générale
It was a classic 15 year with strong participation from asset managers, insurance firms and banks. There was good participation from Asia, but not so much from domestic investors.
There was a slower start but we’re happy with the outcome bringing one of our tightest prints on a 15 year.
The final book was €5.4bn, including joint lead manager interest. We’ve been so used to big order books, so to say this was a small order book is nuanced. For a €2bn sized deal that’s pretty decent and at a tight spread. It was also a busy week for SSAs, mostly because of the EU.
The reason we chose this window as opposed to next week is because we know that many issuers are looking to come to the market.
We’ve now finished the first part of our funding programme of up to €8bn which we issued in three transactions — a €3bn 10 year, a €3bn 13 year and a €2bn 15 year.
The next envelope of €5bn for the rest of our funding programme should come soon.
It’s really difficult to identify the new issue premium for a 15 year, as they are much less liquid than the 10 year area, but a 2bp new issue premium is our estimate.
Coming right after the EU meant we were dealing with something of a guessing game for fair value. We discussed 12bp and 13bp area as starting points but, given the size was fixed at €2bn from the start, we thought 12bp would work.
We were very aware of the EU’s deal. Had it stayed at minus 2bp or minus 3bp, we might have been concerned, but it bedded down well in the aftermarket, so that gave us the confidence to come straight away.
There was around 1bp new issue premium at the final level.
Germany, Austria and Switzerland 25%
Other Europe 4%
Distribution by investor type
Asset manager 49%
Insurance and pension funds 18%
Central banks and official institutions 5%
Hedge funds 2%
“…it’s not a huge book, but it’s one of if not the tightest French agencies to govvies of the year, so it’s a great result.”
“…a good opportunity for an issuer to come in to market after the EU. Not the easiest day, but they got a good result.”