IFR Magazine – January 20, 2018

BONDS COVERED BONDS

back into Australian dollars about 230bp
wide of BBSW, though the US market
obviously has huge depth advantages, as
evidenced by CBA’s US$3.8bn order book.
TD Securities and the issuer’s own
syndication team were joint lead managers
on the trade, with expected ratings of Baa1/
BBB (Moody’s/S&P).

RABOBANK MATCHES MAJOR MARGIN

RABOBANK, Australia branch, (Aa2/A+/AA–)
RAISEDû!MûFROMûLASTû&RIDAYSûlVE
YEARû
senior unsecured note offering, with CBA,
NAB and UBS as joint lead managers.
!ûTRANCHEûOFû!MûOFûmOATING
RATEûNOTESû
was priced inside 82bp area guidance at
three-month BBSW plus 77bp, matching the
MARGINûFORûTHEû!BNûlVE
YEARû&2.û
offering that similarly rated Aussie major
bank ANZ (Aa3/AA–/AA–) issued on January 9.
The Rabobank A$150m 3.25% January 25
2023s were priced at 99.748 for a yield of
3.305%, some 77bp wide of asset swaps and
80.2bp over the April 2023 ACGB.

BEN BANK RAISES A$500m

BENDIGO & ADELAIDE BANK (A3/BBB+/A–) raised

A$500m from last Tuesday’s dual-tranche

lVE

YEARûSENIORûUNSECUREDûBONDûOFFERINGûVIAû

joint lead managers ANZ, CBA, NAB and

Westpac.

!ûTRANCHEûOFû!MûOFûmOATING

RATEû

notes was priced inside 110bp area guidance

at three-month BBSW plus 105bp, while

A$150m of 3.50% January 25 2023 were

priced at 99.966 for a yield of 3.5075%,

105bp wide of asset swaps.

4HEûlRSTûNON

MAJORûBANKûISSUANCEûOFûû

came 28bp wide of the 77bp margin that

ANZ (Aa3/AA–/AA–) paid for its A$1.8bn

lXED

RATEûBONDûANDûmOATING

RATEûlVE

YEARû

note offering a week earlier.

RBC SYDNEY BACK FOR MORE

ROYAL BANK OF CANADA, acting through its

Sydney branch, rated Aa3/AA–

(Moody’s/S&P), priced a US$300m one-year

mOATING

RATEûNOTEûOFFERINGûLASTû-ONDAYûATû

three-month BBSW plus 30bp, in line with

guidance.

RBC Capital Markets was sole lead manager

on the offering.

On November 23, Royal Bank of Canada,

Sydney, sold A$275m of self-led one-year

mOATERSûALSOûPRICEDûBPûWIDEûOFûTHREE

month BBSW.

ASB SELLS THREE-YEAR BENCHMARK

ASB BANK (A1/AA–/AA–) sold NZ$500m

53M    ûOFûTHREE

YEARûmOATING

RATEûNOTESû

last Tuesday, priced at the tight end of three-

month BKBM plus 70bp–73bp guidance. CBA

was sole lead manager.

Pricing was 3bp tighter than the 70bp

margin paid on the last three-year trade for

one of New Zealand’s identically rated major

lenders, ANZ Bank New Zealand’s NZ$375m

print on December 15.

CS READIES AUSSIE TLAC,

CBA STAYS AT HOME

CREDIT SUISSE GROUP (Baa2/BBB+/A–) has

mandated CBA, NAB and its own syndication

team for investor meetings in Australia and

Asia, starting on January 29, for a potential

TLAC-eligible Australian dollar issue.

Last October, Credit Suisse Group raised

¥57bn (US$506m) from triple-tranche senior

callable bonds for TLAC purposes, becoming

THEûlRSTûFOREIGNûBANKûTOûISSUEûYENûCALLABLEû

TLAC-eligible paper.

COMMONWEALTH BANK OF AUSTRALIA (Aa3/AA–/

AA–) plans to price a self-led Australian

dollar 5.25-year benchmark senior

unsecured bond offering in the week

beginning January 22.

COVERED BONDS

EUROS

INVESTORS PICK AND CHOOSE IN TIGHT

COVERED BOND MARKET

DNB Boligkreditt and Canadian Imperial

Bank of Commerce (CIBC) drew riotous

RESPONSESûFORûTHEIRûlVE

YEARûCOVEREDûBONDSû

last week, in contrast to ECB-eligible names

where demand continues to be much more

measured.

DNB BOLIGKREDITTSûõBNûlVE

YEARûTHEû

lRSTû3CANDINAVIANûEUROûCOVEREDûOFûTHEûYEARû

drew over €2.2bn of orders, pricing at 10bp

through swaps. CIBC’s €1.25bn note lured

€1.6bn-plus of demand.

For CIBC, it meant pricing with one of the

smaller concessions for a large benchmark

Lloyds returns to Maples

after six years

„ FINANCIALS UK bank follows host of visitors to Canadian market

LLOYDS BANKING GROUP on Thursday successfully

priced its first Maple deal in six years, achieving

funding diversification by issuing seven-year

bonds that were priced with just a few basis

points in new-issue concession.

The issuer, rated A3/BBB+/A+ by Moody’s/S&P/

Fitch, priced February 2025s at a spread of 135bp

over the interpolated Canadian government curve,

or 138.8bp versus the sovereign’s 2.50% 2024s.

The nearest comparable was Bank of

America’s 3.407% 2025s (callable) that were bid

at 106bp.

After adding a 23bp differential between

callable and bullet bonds (Lloyds is bullet),

fair value came out at 129bp, which meant the

concession was about 6bp.

“The deal represents a continuation of our

prudent funding strategy, which remains one

of building and maintaining a diverse range of

available markets for wholesale funding,” said

Peter Green, head of public senior funding and

covered bonds at Lloyds.

“The pricing of the deal was in line with what

we could achieve in a similar duration in the US

dollar and euro markets,” he said.

Lloyds’ deal joins a growing group of overseas

issuers tapping the Canadian dollar market.

The World Bank and the European Investment

Bank earlier in the year brought the first non-

domestic public-sector issues in Canadian

dollars since 2016.

The pick-up in non-domestic names versus

domestics is part of the appeal for Canadian

investors. The two issues also offered decent

margins over government bonds, World

Bank coming at 37.4bp over and the EIB at

40.15bp.

Non-financials such as Apple, AT&T,

McDonald’s and Walt Disney have also issued

Canadian dollar bonds, which has been a

win-win situation for the issuers and for local

investors.

“The rush of issuance towards Canadian

dollars is being welcomed by local investors

who have cash to put to work but are finding

themselves undersupplied,” said one syndicate

banker.

Lloyds found decent demand for its offering

of seven-year senior unsecured notes, allowing

it to increase the size to C$500m from an initial

C$300m. The final books were around C$1bn,

according to a banker.

The bonds were also quoted around 6bp

tighter once free to trade on Thursday.

TD Securities, HSBC, CIBC and BMO were joint

leads on the trade.

Shankar Ramakrishnan

(Additional reporting by Harry Koza.)