Canada

The size of a covered bond liquidity buffer that protects investors against the risk of payment disruption should be an important risk consideration, but there is no incentive to play safe as regulatory and central bank treatment of the asset class play more pivotal roles in valuations.

Two SSA borrowers hit screens on Tuesday to announce benchmark bonds. Deal flow in the SSA market has slowed after the January rush, but borrowers are still keeping investors busy with a regular flow of deals.

Canada’s Equitable Bank has registered its covered bond programme this week. It expects to issue its first transaction in euros at the short end of the curve in the second quarter.

The Province of Alberta made a rare appearance in the Kangaroo market on Wednesday, printing A$100m with a February 2046 bond. Daiwa Capital Markets ran the books.

GlobalCapital is delighted to announce the nominees for this year’s Americas Derivatives Awards.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, January 25. The source for secondary trading levels is ICE Data Services.

Four US global banking titans roared out of earnings blackout to raise more than $20bn of debt this week, issuing deals either side of president Joe Biden’s inauguration.

Royal Bank of Canada issued a tightly priced €1.25bn 10 year covered bond on Tuesday. While it only attracted just enough demand for it, the long tenor, investor diversification, cost of funding and deal size were positives for the borrower.

A trio of SSA issuers pulled off another string of successful deals in the dollar market on Wednesday, with issuers able to push the envelope on pricing more than is usually possible in January.

CPPIB Capital mandated the banks to lead its first ever 20 year euro benchmark on Friday, in what is also the first mandate announcement for a benchmark transaction by a non-sovereign/sub-sovereign public sector borrower in the long end of the euro curve in 2021.

MTN issuance out of Asia and Sweden provided some of the week’s bright spots in what was otherwise a quiet start to the year. With the public market now in full swing, bankers expect the private placement market to get up to speed in the coming weeks.

Canadian issuers are expected to concentrate on building their regulatory buffers in 2021 mainly with dollar senior issuance with bankers suggesting that analysts’ covered bond supply forecasts for next year, which are considerably above €10bn, are overly optimistic.