Crédit Agricole SA on Dec. 13 priced €1.50 billion in senior nonpreferred bank notes, becoming the first lender to issue bonds in the new debt class, Thomson Reuters' IFR and Cbonds reported.
The 10-year notes carry a coupon of 1.875% and will mature Dec. 20, 2026. The initial issue price was set at 99.504.
The lender started marketing the benchmark bond at between 125 basis points and 130 basis point above midswaps before finalizing the spread at 115 basis points over midswaps as orders topped €5 billion, IFR said.
Crédit Agricole acted as the sole book runner, with Commerzbank, Goldman Sachs, HSBC, JP Morgan and Natixis serving as joint lead managers.
The French government first proposed the new category of loss-absorbing senior bank debt in late 2015 in a bid to help lenders meet their total loss-absorbing capacity requirement without the threat of bailing in extant senior debt. Legislation enabling the new debt, which sits between traditional senior debt and Tier 2 debt, was enacted at the weekend of Dec. 10, IFR noted.
Société Générale SA is set to follow Crédit Agricole with its own senior nonpreferred issuance after announcing an issue mandate Dec. 13, according to IFR. SocGen is expected to soon issue a five-year euro-denominated bond under the debt class and will act as its own book runner.