Banque Populaire Group successfully launches its inaugural Covered Bonds transaction
17/01/2008
Paris, Thursday January 17, 2008 - Banques Populaires Covered Bonds, a whollyowned subsidiary of Banque Fédérale des Banques Populaires, launched its €1 billion 5 year inaugural covered bonds issue on Wednesday January 16 (maturity January 29, 2013) with a coupon of 4.25%. Investor demand was twice the amount of the issue, which bodes well for good performance of the issue on the secondary market.
This first issue is part of a €25 billion programme. Guaranteed exclusively by prime French residential mortgages originated by the Banque Populaire banks, this covered bonds programme enables the Group to diversify its funding sources.
Seven Banque Populaire banks have taken part in this first issue: Banques Populaires Atlantique, Côte d’Azur, Loire and Lyonnais, Ouest, Rives de Paris, Sud-Ouest and Val de France. All Banque Populaire banks expect to be involved in the programme.
Given the tough market climate, this initial transaction is a real success with respect to the quality of the investors and their geographical diversity. Asset managers (39%) and banks(25%) were the dominant investor group. Central banks (11%), pension funds (11%) and insurance companies (7%) were also represented. In total, 15 countries took part in this inaugural issue, with France and Germany accounting for 50% of the order book.
Three banks were mandated for this transaction: Natixis, as lead arranger and bookrunner, with Deutsche Bank and Barclays Capital as bookrunners.
The programme is based on the financial robustness and the internal financing mechanisms of the Banque Populaire Group, the regional roots of the Banque Populaire banks, but also the asset quality, which consists of real estate loans secured with solid guarantees and originated by the Bank Populaire banks.
