Canada

Royal Bank of Canada on Thursday became the first international bank to issue a five year Sonia linked covered bond, a trade that delivered competitive pricing and sizeable funding.

Deals set to be issued by the Province of Ontario and Development Bank of Japan on Wednesday attracted good demand, reflecting their higher yield relative to other dollar supra and agency bonds.

Kommuninvest kicked off the dollar market this week with a $1.25bn blowout, despite it being at record tight levels over Treasuries, according to a banker on the deal. Following on from Kommuninvest’s deal, a wide range of SSAs look to print across the curve, including rare issuer IDB Invest with its five year dollar bond debut.

The Province of British Columbia has weathered volatility from the fallout of last week's meeting of the US Federal Reserve to return to the dollar market for the first time in four years. Another rare SSA issuer, IDB Invest, also plans a return to the dollar market, with investor calls set up for this week ahead of its five year debut.

Two Canadian issuers revitalised the dollar covered bond market this week as Royal Bank of Canada raised €1.5bn of three year funding on Tuesday at half the cost of its senior funding and at a substantially lower cost than a year ago. The transaction was followed by Fédération des caisses Desjardins du Québec (FCDQ) which opened order books for another three year on Thursday.

Canadian Imperial Bank of Commerce did not have to pay any premium to investors on Wednesday to launch its first fixed rate senior deal in the sterling market, which has coped well with a mass of supply in recent days.

Demand for euro covered bonds issued on Tuesday by Virgin Money, NN Bank and DZ Hyp has markedly improved from earlier this month, and lead managers have announced a further series of transactions from Royal Bank of Canada, SR Boligkreditt, Skipton Building Society and Liberbank.

Bank of Montreal and Rothesay Life made use of the quieter political situation in the UK this week to issue in sterling, in the same week issuance paced down in the euro market ahead of the European Central Bank’s meeting.

Bank of Montreal was marketing a senior preferred bond in sterling on Tuesday, one day after Rothesay Life gave FIG investors a chance to put their money in tier two in the same currency. The Canadian issuer started its trade with a 15bp-20bp concession, according to a banker off the deal.

The International Finance Corp (IFC) hit screens this week with its first Canadian dollar green bond. The C$750m ($567m) print was the issuer’s largest ever in the currency, as well as the tightest an international SSA issuer has printed against the Canadian Mortgage Bond (CMB) curve, a large and liquid Canadian dollar benchmark.

HSBC Canada this week issued a larger covered bond and with a higher subscription ratio than it managed on its inaugural deal, reflecting that its marketing efforts had “really resonated with investors”, according to the bank’s head of balance sheet management, Marty Halpin.

The International Finance Corp hit screens on Tuesday afternoon with its first Canadian dollar green bond. The C$750m ($567m) bond is the issuer's largest ever in the currency.