BMO Capital Markets

L-Bank mandated banks on Wednesday for a second attempt at a two year dollar benchmark after it had to pull a deal in the same currency and maturity two weeks ago following a lack of demand. This time, it has opted for a more conventional approach of a traditional syndication and will follow a string of well received trades in the short end of the dollar curve.

The dollar market had looked sluggish, particularly in comparison to the volumes churned out in euros, but Tuesday's $4.5bn two year from Asian Development Bank indicates the market is back in working order.

A leading covered bond investor has reacted positively to a series of measures announced by Canada’s Office of the Superintendent of Financial Institutions’ (OSFI) which have effectively provided stable access to emergency funding, including a temporary increase in the amount of covered bonds the country's banks can issue. The move comes after a heavy spell of supply that had sparked concerns that Canadian banks were struggling for cash.

The dollar bond market is gradually opening up, with two high quality public sector borrowers hitting screens on Monday for short dated deals. But with volatility still gripping the cross-currency basis swap market, European borrowers are still sticking to their home currency.

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Issuers and investors in the Swiss franc market are grappling with much wider spreads on domestic and foreign issuers because of the volatility around the coronavirus pandemic.

L-Bank postponed its dollar transaction on Thursday after not receiving enough orders for the targeted deal size. The trade had been structured as an auction, with investors invited to place bids over their desired level versus mid-swaps. After taking indications of interest, no further updates followed.

L-Bank brought a novel approach to sell a two year dollar deal on Thursday that could help other borrowers navigate volatile markets, with investors invited to place bids for the trade over their desired level versus mid-swaps.

Royal Bank of Canada, Bank of Montreal and Toronto Dominion Bank all issued euro covered bonds in good size this week, finding big savings over senior unsecured issuance. One leading investor said bringing these deals in a fragile market was opportunistic and reflected The Bank of Canada's more restrictive provision of emergency liquidity than in Europe.

Bank of Montreal reopened the dollar market for Yankee banks this week, using ‘shadow books’ to quickly wrap up the sale of its floating-rate note.

It was a mixed picture in the dollar public sector bond market on Thursday. A Norwegian agency was able to tighten the spread of its five year fixed rate trade on the back of a well subscribed order book. But a supranational was not able to achieve the same momentum for an intraday three year Sofr-linked floating rate note.

Ontario printed a first green bond off its domestic medium term note programme this week, and the deal was over six times covered. Demand for green provincial paper is high, with Ontario coming a week after neighbouring Quebec.