Bloomberg News

Credit Agricole Sells Covered Bonds at Lowest Spread in 9 Months

March 29, 2012

Credit Agricole SA (ACA) is raising 1.5 billion euros ($2 billion) selling covered bonds at the tightest yield spread from a French issuer since July.

The 2017 notes from France’s third-largest bank will yield 63 basis points above the benchmark mid-swaps rate, according to a banker involved in the deal. It’s the narrowest spread on a new issue of French covered notes since Credit Mutuel Group sold 2 billion euros of 2016 bonds at 58 basis points on July 5, DZ Bank AG data show.

Banks sold 10.4 billion euros of covered bonds so far this month compared with 16.7 billion euros in February and 26.6 billion euros a month earlier, according to Credit Agricole data. Sales of the notes fell after the European Central Bank pumped more than $1 trillion of three-year loans into the euro- region financial system through its longer-term refinancing operation.

“Sales of covered bonds had declined significantly after the LTRO,” said Serafi Rodriguez, a fixed-income trader at Morabanc in Andorra, who put an order to buy some of the notes. “Credit Agricole chose the right time to come back to the market.”

Deutsche Bank AG, ING, Natixis and Royal Bank of Scotland Group Plc helped Credit Agricole manage the deal which was initially marketed at extra yield of about 70 basis points.

To contact the reporters on this story: Esteban Duarte in Madrid at; Hannah Benjamin in London at

To contact the editor responsible for this story: Paul Armstrong at

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