Canada
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Canadian Imperial Bank of Commerce paid up to tap a euro-denominated senior bond on Wednesday, getting ahead of regulations next month that will make all senior debt subject to bail in. Bank of Nova Scotia also took out over $1bn equivalent of funding in Australian dollars this week. -
Royal Bank of Canada boosted sentiment in the covered bond market on Thursday with a tightly priced €1.5bn seven year. At the same time Société Générale issued a defensively priced and well subscribed €750m five year.
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After a plethora of small deals, the covered bond market look set for a proper test of appetite as Royal Bank of Canada prepares to issue a seven year euro denominated covered bond.
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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.
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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.
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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.
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A long dated euro benchmark from Quebec had the strongest scores of the week on BondMarker.
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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.
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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.
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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.
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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.
