Canada

The Canadian province of Quebec has mandated four banks, including two international firms, to underwrite its first bond in China, a finance official at the provincial government told GlobalRMB.

An exemption for Canadian covered bonds from bail-in is positive, said Fitch this week despite a general concern about the lack collateral available in some covered bonds, and an overvalued Canadian housing market.

Toronto Dominion Bank became the second Canadian lender in three days to enter the euro senior market, with a five year deal. It could encourage US banks to issue in euros after reporting results over the next week.

A long dated euro benchmark from Quebec had the strongest scores of the week on BondMarker.

Bank of Montreal was in the market on Tuesday offering senior preferred debt. This product is set to become very rare, as from September all senior debt issued by banks in the country will be eligible for their total loss-absorbing capacity (TLAC) requirements.

Rating: Aa2/AA-/AA-

A green bond and a conventional bond both hit the euro market on Wednesday. While neither aimed for size, the pricing action showed much hotter demand for the green offering.

Covered bond issuers are monitoring the dollar market with recent deals from DNB Boligkreditt and CIBC suggesting a welcome reception for further issuance. However, Canadian banks, perhaps the most likely dollar issuers, could well be enticed to consider their home market following TD’s recent success.

Two euro borrowers launched benchmarks on Wednesday, sharing the SSA euro market. While both secured successful deals, one found the market tougher going, as investors pushed back.

Canadian Imperial bank of Commerce this week issued the first dollar covered bond in 144A format this year. The funding, which was much cheaper than the cost of raising a similar deal in dollar senior format, could well unleash a slew of supply, mostly from Canadian banks but also potentially from European names.

After an absence of more than two years, Royal Bank of Canada this week issued its first covered bond in euros, attracting a comfortably oversubscribed order book for a €1.5bn deal which was priced with a skinny new issue concession.

CPPIB Capital achieved a double whammy with its debut green bond this week, bringing the first international sale of a green bond by a pension fund that grew into the largest ever green bond in Canadian dollars.