An Italian bank, Intesa Sanpaolo, has issued a 10-year covered bond for the first time in more than a year, with the issue rated higher than the sovereign bond.

The €1.25bn ($1.61bn) covered bond, which is backed by pools of residential and commercial mortgages, attracted over €5bn in return for a 3.625% coupon payable once a year. Barclays, Deutsche Bank, Societe Generale CIB and Banca IMI worked on the deal as joint lead managers, with 83% of demand originating from foreign institutional investors, according to the bank.