CFF Prices Its Second U.S. Dollar Covered Bond - Update
Two tranches: $1.5 billion and $300 million
By:
By Covered Bond Investor™ Staff
07/15/2010
France's Compagnie de Financement Foncier (CFF) has priced its second-ever covered bond denominated in U.S. dollars (July 13).
Pricing for a fixed-rate $1.5 billion tranche was at 75 basis points over mid-swaps, with a smaller, floating-rate tranche of $300 million at 75 basis points over Libor. The issue matures in two years.
The lion's share of orders (62%) came from U.S. investors, according to a public announcement by CFF. Like the company's first U.S. dollar covered bond (priced April 15), this one was offered to big U.S. institutional investors in the private placement market under SEC Rule 144A, which provides an exemption to requirements that would otherwise apply.
Europe accounted for 33% of orders, with investors in Asia taking 3%.
The Wall Street Journal (July 15) reported that "[d]emand for the fixed-rate tranche was five times higher than for the floating tranche" (citing the lead manager for the deal).
Moody's Investors Service assigned a provisional long-term rating of (P)Aaa (July 1) to the issue, which is taking place under CFF's new $10 billion U.S. Medium Term Securities (MTS) Program.
"With this issue, Compagnie de Financement Foncier is showing its innovative capacity, by creating the first US MTS covered bond programme, but also its ability to place large volumes with new investors" said Paul Dudouit, Crédit Foncier's Deputy Head of Financial Markets. (CFF is part of the Crédit Foncier Group.)