Renowned for its AAA/Aaa/AAA rating, Compagnie de Financement Foncier issued a 2-year, €1.5bn new benchmark on Wednesday November 4.
Despite the volatility on the markets, the deal attracted investors drawn by the quality of the issuer and the ability to choose a maturity adapted to their needs. In less than two hours, the order book swelled beyond €2.3bn and confronting little price sensitivity guidance was revised to +10bps over swap, or a rate of 2.033%. The spread was the tightest seen on the market in 2009 for new covered bond issuance in any sector.
On the back of strong demand, Compagnie de Financement Foncier decided to increase the size of the deal to €1.5bn and to adjust pricing at the tight end of the revised guidance. More than 130 investors including central banks and bank treasuries took up the paper. Geographic spread was also impressive with 81% allocated to Europe (Germany 20% and France 18%) and Asia for 19%.
For Thierry Dufour, Deputy Chief Executive Officer of Crédit Foncier, “the success of this deal both in terms of size and spread speaks to the quality of the Compagnie de Financement Foncier name and its ability to seize market opportunities amid market volatility and to the reputation of Crédit foncier, its parent company.”
