Australia

ANZ Bank launched a five year euro benchmark on Tuesday, despite a weak market backdrop, only a few weeks after it tapped the Aussie dollar market with a 10 year covered bond.

Australia and New Zealand Bank (ANZ) issued a A$700m 10 year covered bond overnight on Thursday, in the longest ever maturing deal in that currency. Large parts of the Asian market were on holiday but the deal attracted far greater interest than had been expected and priced at tighter levels than could have been achieved in euros

Not content with pricing the first regulated Canadian covered bond in euros and the first regulated benchmark in US dollars, the Royal Bank of Canada is now marketing its first Australian dollar covered bond benchmark.

National Australia Bank returned to the covered bond market on Wednesday to issue the longest dated euro covered bond deal from an Australian issuer. The €750m 12 year is expected to appeal to yield hungry insurance funds with its generous spread pick up to existing long dated Australian deals.

Westpac became the third issuer in less than a week, and the 10th this year, to tap the US dollar covered bond market. After mandating joint leads for a $1.25bn transaction on Wednesday the deal was priced at the tight end of guidance at 35bp over mid-swaps, which was the tightest five year print in dollars so far this year.

Australia and New Zealand Banking Group slipped in a successful euro benchmark covered bond on Thursday morning ahead of the European Central Bank’s rates decision. The borrower returned to euros for the first time in over a year and closed the tightest covered bond yet from an Australian issuer.

Münchener Hypothekenbank opened books on a £200m three year floating rate deal on Wednesday morning, becoming the latest borrower to take advantage of a starved sterling investor base.

Westpac has returned to the euro covered bond market for the first time since last July, mandating leads for another seven year. It follows trades from BNP Paribas and HSBC where demand was fuelled by central bank statements, that bankers said had exacerbated a short squeeze, causing investors to give up new issue premiums to get current coupon exposure.

The primary market picked up momentum on Thursday with three benchmark deals and one benchmark sized tap being syndicated. ANZ, Bankinter, KBC and Compagnie de Financement Foncier (CFF) unearthed a over €3bn of demand.

ANZ looks set to price the first sterling FRN since last May and its first ever covered bond in that currency. It has returned to the covered bond market for the first time this year to take advantage of swelling demand in sterling.

Commonwealth Bank of Australia has demonstrated how globalised the covered bond market has become by selling almost half of the year’s first dollar covered bond benchmark to European buyers. CBA issued its deal, Australia’s first covered bond of 2013, on Wednesday. The $2bn 0.75% January 2016 was priced at the tight end of guidance at 32bp over mid-swaps and 44bp over US Treasuries through joint leads Barclays, CBA and RBC Capital Markets.

Commonwealth Bank of Australia is ready to launch the first Australian covered bond of the year, after mandating banks for a benchmark US dollar deal that an official close to the deal told The Cover was likely to come on Wednesday. The Australian covered market is set to be the fastest growing this year, with Fitch predicting up to $37bn of supply.