Canada

Covered bond new issue premiums fell on Tuesday as four borrowers launched deals worth over €2.5bn in total, on collective demand of about €5bn. LBBW’s second deal of the month was priced 1bp tighter than its last bond, even though it was two years longer. Bankia was set to issue at less than half the concession paid by peripheral borrowers last week, while Bank of Montreal and Bank of Nova Scotia were set to price in line with recent Canadian predecessors.

Bank of Nova Scotia, the third Canadian institution to issue a covered bond this week, took €1.25bn with its five year covered bond on Thursday. While the books were slightly slower to build than market rivals BPCE and Commerzbank, the result was still a strong one for the issuer.

Royal Bank of Canada was set to price its first sterling benchmark in years at a spread that is expected to lead to a re-pricing of the market, but which is close to where it would have funded in dollars. Meanwhile, CIBC will open books for its first dollar deal in four years and the first from its legally compliant programme in that currency.

In this round-up, Singapore deposits fell in the first quarter this year, Taiwan RMB deposits rose to a new record, Bank of China joined the new gold benchmark, and the first overseas inverse ETF shorting A-shares entered the market.

Royal Bank of Canada incurred the wrath of the market on Wednesday when it issued a €1bn deal from a €750m book. The spread, which offered an insufficient concession to Toronto Dominion’s earlier deal this week, widened by 4bp and caused the market to widen 2bp. At the same time Bunds fell sharply, suggesting the seven year may no longer be the market’s sweet spot.

Royal Bank of Canada mandated leads for a seven year euro benchmark covered bond on Tuesday. The announcement comes a few hours earlier than usual and should give investors more time to consider the transaction which, if history is any guide, may be in a large benchmark size.

Toronto Dominion was set to price the first covered bond of €1bn or more in nearly six weeks on Tuesday. The five year transaction, which was expected to offer double the coupon of its previous seven year launched in mid-April, was being closely monitored by a number of other issuers who are aiming to launch deals before the onset of summer.

In this round-up, Hong Kong deposits rose in April, but cross-border RMB trade settlement fell, Macau announced its March deposit figures, ICBC opened two new offshore branches in Montreal and Riyadh, RMB clearing in South Korea has reached a daily average of Rmb25bn, and Japanese bank MUFG helped Brazilian clients settle trade with China in RMB.

Benchmark euro covered bond issuance from a core borrower is expected soon after Rabobank and Swedbank reopened the senior market. Meanwhile, DNB Boligkreditt followed ANZ into the dollar 144A market on Wednesday with a similarly sized deal, in the same tenor and at the same price.

The latest data from the Society for Worldwide Interbank Financial Telecommunication (Swift) shows that the renminbi has returned to fifth place in the ranking of most active global payments currencies, accounting for 2.03% of payments worldwide in March 2015.

Toronto-Dominion Bank smoothly executed the sixth seven year euro covered bond this week despite a Bloomberg blackout delaying the process. The larger than usual €1.25bn deal offered a decent new issue premium and attracted comfortably oversubscribed book.

National Bank of Canada (NBC) priced the first 144a three year dollar benchmark since July 2013 on Monday. The lack of comparable deals meant there was an element of discovery in pricing, which was almost excessively defensive. BayernLB was set to price a three year Reg S public sector dollar benchmark.