Party over for covered issuers as RBC sheds orders

RBC right size
By Bill Thornhill
13 Jun 2019

Royal Bank of Canada’s €1.25bn seven year issued on Wednesday dropped more orders than any covered bond has in years, ending up as one of the least subscribed deals of its size since 2011. The transaction starkly illustrated that the balance of power has shifted in favour of investors and offered a salutary lesson for ambitious issuers, writes Bill Thornhill.

At its peak the order book for RBC’s trade stood at €1.9bn but, by the time the size and spread had been agreed, the deal had shed €600m of orders — making it one of the two least subscribed covered bonds of this size since 2011.

“It’s ...

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