TD Securities
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Royal Bank of Canada and Toronto Dominion returned to the dollar covered bond market this week, taking the number of benchmark issues in the currency this month to four. The two $1.75bn triple-A five year deals priced at 27bp and 29bp over mid-swaps, respectively. While the two deals became joint largest dollar deals this year, it was RBC’s deal was the tightest in dollars for several years.
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Asian Development Bank has hopes of printing in Canadian dollars again soon, having this week sold its first deal in the currency in over seven years and its first debut seven year deal in Canadian dollars.
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National Australia Bank attracted a high level of European demand for a dollar denominated deal on Tuesday. The unusually broad distribution paid testimony not only to the novel syndication approach, but also the tempting outright yield relative to what would have been seen in euros.
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A trio of issuers printed oversubscribed deals in dollars this week, including the Inter-American Development Bank’s largest ever dollar global. More borrowers are eyeing issuance in the currency given the impressive levels of demand on offer, although holidays next week will make windows of issuance few and far between.
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The supranational and agency issuers that reopened benchmark issuance in dollars this week enjoyed strong demand as investors starved of supply scrambled to put their cash to work.
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Kangaroos and Kauris — not dollars and euros — could grab the attention of supranational agencies in the coming months, with price rather than prodigious volumes likely to be the issuers’ focus as they flirt with near-completed funding targets. Jonathan Breen and Nathan Collins report. -
The International Finance Corporation is looking to enlarge its Brazilian reais issuance and boost its profile with Uridashi investors.
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More issuers are expected to tap the New Zealand dollar market soon, following a Eurobond from ANZ on Monday. Syndicate bankers away from the deal predict that issuers will look to take advantage of growing investor interest in the high yielding currency.
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More issuers are expected to tap the New Zealand dollar market soon, following a Eurobond from ANZ on Monday. Syndicate bankers away from the deal predict that issuers will look to take advantage of growing investor interest in the high yielding currency.
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Toronto Dominion’s first legally compliant covered bond stormed the market on Monday morning, raising €1.75bn — €750m more than any of the other five Canadian euro covered bond benchmarks that have been launched this year, and the joint largest euro deal of the year.
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A favourable basis swap and attractive opportunities at the far end of the curve are likely to spur European agencies to take to the far end of the curve in Australian dollars in the coming weeks. Opportunities also exist in the belly of the curve, however, with the Inter-American Development Bank benefiting from an attractive spread over local public sector paper for a long five year this week.
