North America

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.

National Bank of Canada is on track to sell a $750m three year covered bond, its first covered bond in dollars since 2011.

Toronto Dominion issued the ninth sterling denominated covered bond of the year on Wednesday, and the third from a Canadian bank in the three year floating format. The transaction provided better executable funding than it could have achieved in dollars or euros. The issuer followed Bank of Nova Scotia, which on Tuesday priced the third Canadian dollar benchmark of the year, funding more cheaply than was possible in euros.

A pickup in primary market activity continued apace on Wednesday when Stadshypotek sold the sixth dollar denominated covered bond in the US this year.

Toronto Dominion Bank became the fifth borrower this year to issue a dollar covered bond and the second from Canada. The spread it achieved was tighter than previous deals and cheaper than it could have achieved in the euro market.

Canada officially launched its renminbi settlement hub this week, after the country became the first RMB hub in the Americas in November last year.