Canada
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After a bumper two weeks, issuance in dollars slowed down this week in anticipation of the Federal Open Market Committee’s meeting on April 26-27.
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Covered bond activity slowed this week with only three deals emerging, half the number seen in the prior week, with Canadian issuers at the fore.
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A pair of rare SSA names kept Kangaroo and Kauri bond supply ticking over this week, as Asian investor appetite drove demand. -
The Province of Ontario on Wednesday became the second Canadian issuer to print a 10 year dollar benchmark this month, adding to a recovery in issuance at that part of the curve.
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Bank of Nova Scotia (BNS) has issued the largest legislative US dollar denominated covered bond at a considerably tighter spread than the previous two transactions and with a minimal new issue concession.
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An increase in swap spreads at the short end of the curve drove public sector issuers to focus their attention on shorter maturities in the dollar market this week.
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Toronto Dominion Bank attracted the highest oversubscription level of any Canadian deal issued in euros this year even though it was its fourth foray into the covered bond market in 2016.
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The Province of Ontario is to hit the dollar market on Wednesday with a 10 year benchmark while the Asian Development Bank (ADB) and Oesterreichische Kontrollbank printed deals on Tuesday, as bankers noted the popularity of dual tranche deals in the currency.
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A spate of dim sum MTN issuance that began with Australian banks has spread to include Canadian, Middle Eastern and European institutions.
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Bank of Montreal (BMO) issued a €1.5bn five year covered bond on Wednesday, and despite the deal’s large size, it paid a modest new issue concession with an overall cost of funding that was lower than recent Scandinavian deals. The deal followed Canadian Imperial bank of Commerce (CIBC) which issued the first Australian dollar covered bond of 2016.
