Canada

Bank of Nova Scotia was looking to test investors’ appetite for one of first additional tier one transactions of the coronavirus pandemic on Thursday, helping to set a reference point for pricing in the asset class.

Banks are bounding back into the Kangaroo market. On Wednesday, BNP Paribas jumped in to sell the first syndicated Australian dollar senior non-preferred deal since the start of the Covid-19 crisis, later that day the Bank of Nova Scotia announced plans to join the fray with a mandate for a three year bail-inable deal.

A quartet of SSAs borrowed a combined A$940m ($613.4m) into the Kangaroo market this week, spurring the SSA Aussie dollar market on to its best monthly volume in over nine months.

Dollars was the favoured currency for public sector borrowers for the second week running this week, giving attractive funding conditions for euro borrowers amid strong investor demand, particularly in the 10 year part of the curve.

Belgium took advantage of more attractive funding conditions in dollars versus euros and strong demand at the 10 year point of the curve to sell its first dollar bond since 2017 on Tuesday. SSA supply in dollars will continue on Wednesday with the Asian Infrastructure Investment Bank and Nederlandse Waterschapsbank bringing socially responsible deals.

Belgium is set to issue its first dollar bond since 2017 as euro funders continue to take advantage of the attractive funding conditions in the currency, with three other public sector borrowers also in the market for dollars.

The Province of Ontario raised $1.75bn with a rare seven year dollar benchmark on Thursday. The transaction shared the market with a five year from Japan Finance Organisation for Municipalitities.

The Republic of Finland had to share its return to dollar market on Wednesday with a trio of three year SSA deals. Demand for dollar SSA bonds has been strong this week, and with mandates out for five and seven year deals,issuers are still looking to take advantage

Five public sector borrowers are marketing dollar bonds across the curve kicking off what it is expected to be a busy week in the currency.

HSBC Canada issued the most oversubscribed dollar-denominated Canadian covered bond in years on Thursday, and still managed to price 28bp tighter than the Canadian heavyweights.

HSBC Canada is set to become the third Canadian bank to issue a dollar covered bond this year, mandating leads for a three year transaction on Tuesday. Given a strong secondary market performance, HSBC Canada should be able to price its deal a lot tighter than its predecessors.

The European Investment Bank and the Region of Madrid stood out in the public sector bond market this week, with the former achieving its biggest ever order book for a euro benchmark.