NAB attracts LCR bank bid, boosting issuance hopes

By Bill Thornhill
28 Aug 2014

A €500m covered bond tap from National Australia Bank this week attracted unexpectedly vigorous interest from European bank investors on speculation that, despite coming from outside the European Economic Area (EEA), it will be eligible for inclusion in liquidity buffers. The deal will have been closely watched by other non-EEA issuers wanting to take advantage of demand before final regulatory guidelines are published at the end of September.

When NAB issued its €750m, 1.375% May 2021 at 26bp over mid-swaps in May this year the bonds were categorically not eligible for inclusion in the liquidity coverage ratio, and there was no expectation that they ever would be.

However since then, a draft proposal from the European ...

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