Canadian Imperial Bank of Commerce sold a A$600m (Eu452m/C$611m) three and a half year Australian dollar covered bond at swaps plus 50bp yesterday (Thursday), its third issue in the currency.

Leads CBA, CIBC, HSBC and UBS built a book of close to A$700m during the four hours for which books remained open.

“We aimed for a deal of A$500 and got an order book under A$700, so we’re quite satisfied with the trade,” said Wojtek Niebrzydowski, vice president, treasury, at CIBC.

Pricing was in line with the initial guidance.

The trade is the third Australian dollar denominated covered bond to be launched by CIBC since October, when it reopened the market for covered bonds in the currency. The issuer moved more quickly than previously given the volatility in the financial markets.

“Usually, with the ones we’ve done in the past,” said Niebrzydowski, “we would open in Australia overnight, but considering the global backdrop we only opened books for four hours.

“It was principally domestic investors and bank balance sheets,” he added.

Australia took 81%, Asia 15%, and Europe 4%. Banks took 71%, real money 19%, and central banks 10%.

Niebrzydowski said an Australian dollar deal was much more feasible than a Canadian covered bond issued in euros.

“It just doesn’t work in terms of economics,” he said. “It would be 30bp-35bp more expensive to do it in euros versus Australian dollars on Canadian dollar equivalent basis.”

There have been no Canadian covered bonds issued in euros since September 2008.