Canada

The Province of British Columbia (BC) is set to price its debut Panda bond on Thursday, January 21. The up to Rmb3bn ($457m) three year offering is being marketed at a range of 2.6%-3.0%, several sources have told GlobalRMB.

Covered bonds issued this week from Lloyds and Bank of Nova Scotia were among the largest seen this year and attracted the biggest order books.

A pair of SSAs are set to bring dollar deals on Wednesday, despite worries over the health of the Chinese economy making life difficult for other issuers in the currency on Tuesday.

Lloyds issued the first sterling covered bond of the year and was quickly followed by two overseas issuers who priced deals at successively wider levels.

Eleven covered bonds were priced in the first week of 2016 despite the onset of European holidays and US non-farm payroll data.

Bank of Nova Scotia issued the third sterling three year floating rate note of the week, paying a slightly wider spread than Nordea and Lloyds. While this led to questions about the depth of the sterling market, bankers said the differential was justified and noted that the final funding outcome was attractive compared to alternative markets.

The Toronto-Dominion Bank priced a €1bn five year covered bond on Tuesday, with the issuer able to tighten pricing from initial price thoughts on the back of strong demand for the non-ECB eligible paper.

The Canadian covered bond market is one of the few that is expected to continue growing in 2016. With Canadian banks likely to issue a similar amount of euro benchmark paper as Italian banks the region is expected to produce the fourth equal largest amount of supply next year.

Canadian Imperial Bank of Commerce took advantage of a back-up in three year euro swap yields following the European Central Bank meeting last week to issue a covered bond of the same tenor.

Canadian Imperial Bank of Commerce (CIBC) has printed a 10 year note on Monday, its first Swiss franc covered bond since 2012, and its fifth currency in covered bonds this year.

Unédic and the Province of Quebec on Monday became the first issuers to print in euros since the European Central Bank disappointed market participants at a meeting of its governing council last week.

Canadian Imperial Bank of Commerce took advantage of the back-up in three year euro swap yields following the European Central Bank meeting last week to issue a covered bond on Monday. The issuer paid a relatively small concession, funded 10bp more cheaply than it could have done in the dollar market and placed nearly a third with central banks.