Oceania

Australia’s Westpac Banking Corp returned to the euro market to launch the jurisdiction’s first seven year covered bond on Monday. But a trio of competing senior unsecured trades contributed to a slow book build, said syndicate bankers, with some also suggesting guidance had been set too tight.

New Zealand’s ASB Finance plans to bring annual euro benchmark covered bonds following its successful debut this week. Although happy with the outcome on its first deal, the issuer told The Cover that ASB’s sound fundamentals and the advent of domestic legislation should help tighten spreads for follow-on deals.

Caisse de Refinancement de l’Habitat launched the largest French covered bond in months when it tapped a 12 year trade for an impressive €750m on Wednesday. But despite evident domestic demand, follow on trades are likely to have to wait until after the Greek elections.

Suncorp Bank could turn to the euro market for its next covered bond trade after launching an inaugural deal in Australian dollars this week. Meanwhile, both tranches of Clydesdale Bank’s domestic debut were trading tighter on Friday morning. But though the borrower said it will be a repeat issuer in the covered market, the euro basis swap will consign it to sterling for the time being.

Australian lender Suncorp-Metway sold its debut covered bond on Wednesday, raising A$1.6bn ($1.56bn) after adding a short-dated tranche that boosted the deal to more than double what the bank was initially aiming for.

Commonwealth Bank of Australia came to market with its second euro benchmark of the year on Wednesday. The 10 year trade drew huge demand, allowing leads to print a €1.5bn deal an exceptional 11bp inside of initial price thoughts.

The passing of Australian covered bond legislation gave the covered bond market a timely fillip. Without the arrival of Australian issuers, 2012’s year to date level of supply would be even further behind last year’s. As such, subdued eurozone issuance has quickly turned Australian covered bonds into a pillar of the market – and not just a convenient safe haven trade.

Australia and New Zealand Banking Group looks set to become the third Australian borrower to issue in its domestic currency. ANZ has mandated leads for a four year dual tranche, fixed and floating rate benchmark. Westpac has issued its first deal denominated in Swiss Francs