Europe

Credit Suisse attracted a staggering 168 investors for its $2bn three year trade, more than double the interest recent Canadian dollar benchmarks have enjoyed, and it still had to leave some prospective buyers empty handed. The three year 144a/RegS trade was increased from the original $1bn target print on the back of huge demand, and was priced through the secondary curve of Swiss peer UBS on Thursday evening.

Société Générale built a €6bn book for its second trade of 2012 on Thursday, pricing a €1.5bn benchmark well inside initial guidance. Meanwhile, Credit Suisse launched only the second dollar trade from a European bank since last September.

A higher than expected take-up from a broader number of banks in the European Central Bank’s second long term refinancing operation has provided a lift to what is already a very well bid covered bond market.

The performance of cover pools has deteriorated, Crédit Agricole research has found after examining Moody’s, Standard & Poor’s and Fitch’s data. But this is not because of worsening credit risk but rather because of market risk.

ANZ National built a benchmark sized orderbook for a €250m tap of its inaugural euro covered bond on Tuesday and priced the deal inside its outstanding curve. With some buyers sidelined due to a lack of a legislative framework in New Zealand, the strong reception bodes well for an issuer intending to launch yearly euro trades.

Caisse de Refinancement de l’Habitat launched a €1.75bn 12 year benchmark on Monday. Though this was its second long dated deal this year and the sixth such French benchmark this year, there has been no long euro benchmark issuance since February 1 and as such, the market was desperately in need of this paper.

The inaugural public benchmark from Spain’s Bankia boasted the highest spread and shortest tenor of any deal this year. It now plans to return with a longer dated trade, building on the strong demand it found for Wednesday’s deal.

Deutsche Bank pulled in more than €2bn of orders for the third German Pfandbrief of 2012. Leads priced the €500m no grow trade at 22bp on Wednesday, making it the tightest trade of the year so far, and the bond tightened further in the secondary market on Thursday.

The tightest and widest transactions of 2012 were priced on Wednesday, with Bankia launching a two year Cédulas at 290bp over mid-swaps, while Deutsche Bank priced a blow-out seven year trade at 22bp over mid-swaps.

Bankia restarted primary supply on Wednesday, opening books on a two year €500m trade that could easily have been increased on the back of strong demand, according to syndicate leads. Though the settlement date means the bonds cannot be used in the second Long Term Refinancing Operation, the deal still attracted interest from across the Eurozone. As the lowest rated issuer to tap the covered bond market this year, Bankia’s success could prompt other lower tier names to follow.

NAB subsidiary Clydesdale bank has priced an euro denominated RMBS 50bp wider than where NAB issued a floating rate sterling covered bond.

Iceland’s Arion Bank sold Ikr2.5bn (€15m) in its first covered bond auction since the issuer was created from the Icelandic arm of Kaupthing Bank in 2009.