On July 13, 2010, Compagnie de Financement Foncier issued USD1.8 billion in 144A/RegS 2-year Covered Bonds (Obligations Foncières) split into two tranches: a fixed-rate tranche of USD1.5 billion and a floating rate tranche of USD300 million. The issue format was flexible so as to serve investors’ interests as effectively as possible.
Demand ahead of the deal from US key accounts contributed to the success of this issue, whose size was increased in response to investors’ enthusiasm.
The deal generated an order book of USD2 billion, from very high quality accounts, of which 25% were central banks and agencies and 41% were asset managers.
Compagnie de Financement Foncier’s second benchmark issue on the 144A market
This deal was Compagnie de Financement Foncier’s second benchmark issue on the 144A market and the first following the introduction of its US MTS programme. With these two issues, Compagnie de Financement Foncier has re-opened the 144A covered bond market and is the only French and European issuer currently active in this segment. Compagnie de Financement Foncier considers the US investor base to be a key element for its development and intends to continue to be a regular issuer on this market.
“With this issue, Compagnie de Financement Foncier has shown its capacity to innovate, by creating the first US MTS covered bond programme, and its ability to place substantial volumes with new investors” explains Paul Dudouit, Crédit Foncier’s Deputy Head of Financial Markets.
