French agency Sagess has once again attracted plenty of interest from euro accounts, getting a €6.9bn final book for its no-grow €500m six-year note, riding a rally in yields in the process. Its success is a good sign for the tap lined up by Sagess' compatriot Agence France Locale, but weaker performances by other SSAs on Tuesday showed that more specific products are still struggling to gain traction in the euro market.
BNP Paribas, CIC, Credit Agricole, HSBC, Natixis and Societe Generale ran Sagess' deal, pricing it at 54bp over OATs, 6bp tighter than guidance. That left 4bp of new issue concession, according to a lead. Another lead put it around 2bp–3bp.
"It came at the right moment after this big rally in the market," the second lead said. "There's not that much SSA supply at the moment and I think Sagess as a French agency does trade a little bit wider. As a result, people have found that it is good value – the starting new issue premium was wider than most SSA or French agency deals." He said that helped get people on board.
The print was the second well-bid euro bond from Sagess this year. In June, it got a blowout €10.5bn book for a €500m seven-year, when it was seen as benefiting from strong demand for French agencies.
Those performances are in contrast to the rough reception Sagess got in euros in the middle of last year, when it was forced to postpone a June 2029 bond sale with an expected €500m size. At the time it was seen as falling victim to its intermediate status between SSA and corporate status, as well as how it looked versus mid-swaps. It reiterated its access to euros two months later in a €1bn 10-year.
AFL is aiming to take advantage of the same accommodating window, mandating its own deal in the single currency as Sagess built its book. It has appointed BNP Paribas, Credit Agricole and Natixis to run a small €250m no-grow tap of its 3% March 2030 line.
Austrian agency Oesterreichische Kontrollbank is also targeting euros. It has mandated BNP Paribas, Danske Bank, Deutsche Bank and UniCredit to place a €500m no-grow sustainability bond.
Those mandates were despite the weaker responses a pair of other SSAs got in euros on Tuesday, though both were offering more specific products, one being a rare euro sukuk offering and the other a German Land.
The Islamic Development Bank built a €580m book for its €550m five-year sukuk, though it could only raise that size thanks to the €75m joint lead manager bid. Those JLMs, Abu Dhabi Commercial Bank, Credit Agricole, Deutsche Bank, HSBC, JP Morgan, Societe Generale and Standard Chartered set the spread flat to the mid-swaps plus 33bp IPTs.
The market for euro sukuk is not well developed – the last one was in 2019, also from IsDB, when it priced a €1bn five-year green Islamic bond in November that year. The bank prints euro sukuk to on-lend to member states that have euro requirements, said an IsDB lead.
The German state of Thuringia did not publish a book for its own five-year after setting the spread for the €500m no-grow bond at 2bp through mid-swaps from the outset. Deutsche Bank, DZ Bank, Helaba and NordLB handled the syndication.