Canada

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.

In a sign of the strength of the Canadian banking sector, Bank of Montreal and Toronto Dominion Bank were able to access the euro covered bond market in good size on Thursday with deals that provided a substantial saving compared to senior unsecured issuance. The deals followed a series of measures to ease liquidity from the Bank of Canada, including widening repo' eligibility to covered bonds.

Executing bond syndications from home has proved to be feasible, bankers said in the wake of Royal Bank of Canada’s five year covered bond issued on Tuesday. Even so, the lack of physical back-up from nearby colleagues and the seamless access to certain key functions such as trading means that working from home is very much second best in practice compared with normality.

Royal Bank of Canada, Toronto Dominion Bank and Canadian Imperial Bank of Commerce all attempted to access the covered bond market on Tuesday with euros clearly showing more depth than sterling. The fact the three issuers were in the market simultaneously, whilst a fourth was monitoring the market, is not coincidental and contrasts with European and UK issuers that already have a central bank liquidity life line.

Bank of Nova Scotia (BNS) became the first bank outside Europe to issue a deeply negative yielding covered bond in a good size on Wednesday. The transaction provided a beacon for other issuers and was perfectly timed to benefit from a window of market stability between Monday’s and Thursday’s shocking volatility.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, March 2. The source for secondary trading levels is ICE Data Services.

Guarantor: CPP Investment Board (CPP Investments)

CPPIB Capital came to market for a dollar benchmark on Wednesday, after mandating the deal last Friday. The trade had been postponed to avoid printing in the peak of the volatility sparked by the worsening Covid-19 outbreak.

CPPIB Capital is moving forward with its five year dollar benchmark which was mandated last Friday but postponed following the hostile market conditions at the start of the week. Bankers away from the deal expect it to go well, given the limited size.

CPPIB Capital, which mandated banks for a five year benchmark on Friday, has postponed the deal in the face of a hostile market rocked by volatility engendered by the Covid-19 coronavirus outbreak.

Ontario Teachers’ Finance Trust has chosen four banks to organise a series of meetings with euro fixed income investors, ahead of what will be the issuer’s first bond in the currency.

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.