CIBC World Markets

Canadian bank takes A$1.5bn with biggest covered deal in currency since September 2023

◆ Pricing over size prioritised... ◆ ... but likely not at the initial stage ◆ Elevated concession, albeit not the main measure of FRNs' attractiveness, suggests limits to investor demand

◆ Minimal premium paid ◆ Structural demand from UK bank treasuries down but Asia steps in ◆ Sterling spread vs euro more attractive for issuers

◆ Canadian issuer returns after two years ◆ Deal grabs record demand ◆ Leads were 'careful to get pricing right'

◆ CIBC seen 'dismissing own curve' to price tight deal ◆ More scope for Canadian issuance, say bankers ◆ KHFC draws less demand

◆ Spreads too good for banks to regret issuing ◆ One of the busiest September starts in US FIG ◆More than a dozen foreign banks print over $27bn in just three days

◆ Rival bankers give mixed assessment ◆ Final order book shrinks ◆ Fair value 'tricky' to assess

◆ Foreign FIG issuance so far in 2024 outstrips last year’s volume by more than $20bn ◆ Multiple Canadian and Japanese lenders print ◆ US banks prepare capital plans after the Fed’s latest stress tests

Redemptions, limited supply and a favourable rates outlook created a window for the issuer

Not all issuers drew large oversubscriptions in mixed market

At least four issuers will price dollar deals of between three and 10 years on Tuesday

German issuer upsized the deal despite sell-off in rates