Canada

KfW and CPPIB Capital achieved super tight pricings in the short end of the US dollar market on Thursday, with the former bringing the first deal with a negative spread to mid-swaps in the currency by a public sector borrower this year.

Canada’s Office of the Superintendent of Financial Institutions has removed the temporary increase of the covered bond issuance limit mirroring the Bank of Canada’s earlier decision to remove covered bonds as an eligible asset for repo funding.

Three SSA borrowers were set to come to market for five year paper on Wednesday, with two targeting fixed rate benchmarks and the other a five year floater linked to the secured overnight financing rate.

Fédération des caisses Desjardins du Québec (CCDJ) issued a rare and well subscribed five year euro covered bond on Tuesday, which was priced inside fair value. The outcome was similar to a recent deal from National Bank of Canada, but is not expected to boost supply prospects.

The Covid pandemic has delayed a lot of progress in the capital markets, but bankers say the industry is still on track to meet Libor transition deadlines. Investors have consented to the Bank of Nova Scotia transitioning the basis of its sterling covered bond from Libor to Sonia, while Westpac is seeking consent.

National Bank of Canada’s €500m seven year covered bond issued on Thursday, showed that a positive spread to mid-swaps has a greater impact on demand than a positive yield.

Verizon Communications, the US telecoms group, embarked on an almost $3bn niche currency bond issuing spree this week, which included the largest foreign Swiss franc bond since early 2018.

Sameer Rehman, director of debt and capital markets at TD Securities in London, is heading back to Toronto after 12 years in the UK to focus on Canadian public sector borrowers.

Bank of Nova Scotia returned to the dollar market with its first new trade in five months this week, after reporting its fiscal first quarter earnings. It was followed by Truist Financial selling an inaugural social bond.

Tryg Forsikring found strong demand for a new restricted tier one (RT1) bond in the Swedish market on Wednesday, as it looked to optimise its capital structure in preparation for the purchase of RSA Insurance Group’s Nordic businesses.

A pair of sovereigns privately placed century bonds this week, with one of the borrowers — Ireland — dipping below the 1% point for the first time at this sort of tenor.

CPPIB Capital made a strong return to the 10 year part of the euro curve on Wednesday, with a book over two times covered and a new issue premium of just 1bp. Bremen also hit the euro market, selling €500m of 30 year paper through its curve.