Covered bonds: First benchmark covered bond for maple market

French mortgage bank Compagnie de Financement Foncier has sold the first benchmark covered bond issue in Canada’s maple bond market. The 10-year issue was so oversubscribed that the borrower increased its size by 25% over the originally planned figure. "We originally considered a C$400 million issue, but it was so oversubscribed that we were able to increase that to C$500 million (US$443 million), which offered a benchmark size for the market," says Tim Skeet, head of covered bonds at Merrill Lynch, which acted as lead manager on the deal, alongside Royal Bank of Canada. "It was one of those deals that really worked. It caught the market, it caught the moment and it caught the imagination."

Strong words, maybe, but in this instance they might well be justified. The issue is certainly a success. In very little time, CFF had an order book in...