TD squeezes between CBA and Nationwide
Toronto Dominion returned to the euro covered bond market for the second time this year, pricing the third seven year from an issuer outside the eurozone this week. The spread TD achieved reflected the importance of regulatory treatment, since better treatment allowed Nationwide to price tighter, and worse treatment forced Commonwealth Bank of Australia to price wider.
Suncorp gives spread
Suncorp-Metway has priced its first covered bond deal since November 2012. The two tranche fixed and floating rate Australian dollar transaction offered an attractive 12bp spread pick up to where the previous covered bond issued by Royal Bank of Canada had been trading.
Investors sensitive to Nationwide’s price
Nationwide Building Society’s third covered bond of the year had to offer an attractive new issue premium because there was considerable price sensitivity in the book. The deal illustrates that, despite a technical undersupply of covered bonds, there is a greater balance between supply and demand than perceived, especially for bonds ineligible for the European Central Bank’s purchase programme.
CBA gets to single digits
Commonwealth Bank of Australia (CBA) was set to price Australia’s first euro benchmark covered bond in single digit territory over mid-swaps on Tuesday. The deal, which was announced at short notice and which was slow to build early traction, nevertheless managed to attract new investors, though at 14%, bank demand was disappointing given the bonds are now eligible for their liquidity buffers.