Americas

Canadian Imperial Bank of Commerce has priced the tightest ever Canadian covered bond issued in euros. The price discovery process was also notable for skipping out guidance and going straight from initial price thoughts (IPT) to final spread.

Canadian Imperial Bank of Commerce has mandated leads for its first euro benchmark covered bond of the year. With comparable deals trading through mid-swaps, the transaction has potential to price inside Euribor, even though its bonds are not eligible for the European central bank’s purchase programme.

The lack of a securities lending market for green bonds could be stifling the ability of banks to make markets in the product, leaving the buyside struggling to pick up paper in secondaries, a leading investor told GlobalCapital this week. But on the primary side, green demand grows ever healthier, with another set of firsts from public sector borrowers on the way.

General Motors is planning to introduce its captive auto finance arm into the Chinese market later this year, paving the way for more issuance of auto loan securitizations in the world’s largest auto market. But concerns still remain around the asset class, in a country where securitization laws are relatively new.

TD priced a $1.75bn 144A private placement covered bond on Thursday at the same spread as Bank of Nova Scotia, which issued a $1.5bn SEC-registered deal two weeks ago. The deal should have priced wider but thanks to demand from Europe, it got great price tension.

Toronto-Dominion has mandated leads and announced initial price thoughts for its first benchmark US dollar covered bond under Canadian legislation.

Royal Bank of Canada returned to the dollar covered bond market for the first time this year, issuing the third benchmark in that currency this month. The $1.75bn deal priced at 27bp over mid-swaps, making it the equal largest this year and tightest in dollars for several years.

Royal Bank of Canada (RBC) mandated and launched the fifth US dollar covered bond benchmark of the year on Tuesday. The issuer followed the lead of Bank of Nova Scotia which priced the first US dollar denominated Canadian covered bond a fortnight ago.

Royal Bank of Canada has priced its first Australian dollar covered bond of the year and the second in that market this year. The funding was close to what it could have achieved in US dollars and demonstrated the ability of the Kangaroo market to be strategically relevant to the global funding programmes of financial institutions, said RBC.

Toronto-Dominion Bank was set to price the first sterling denominated Canadian three year covered bond on Friday, which will be the seventh sterling covered bond this year and the third deal from a non-UK name. It is also the largest sterling deal issued by a bank outside the UK.

Bank of Nova Scotia was set to price the tightest and longest Canadian covered bond issued in euros on Wednesday. It was also the tightest spread for any non-German seven year seen this year, and at €1.5bn the largest in that tenor.

A few draft restrictions related to the eligibility of European covered bonds in the liquidity coverage ratio (LCR) have been dropped by the EC suggesting the final wording, due at the end of September, will be supportive for covered bonds. In contrast, covered bonds have been left out in the final wording of US LCR regulations, in line with expectations.