Bank of Montreal priced a $2bn (Eu1.54bn/C$2.02bn) five year covered bond yesterday (Monday), the third dollar benchmark in three working days and following Canadian peer Bank of Nova Scotia, which tapped the US market on Friday.

BMO’s deal comes after a $1.5bn three year inaugural issue for UBS on Thursday, which was the first US dollar benchmark covered bond of the year, followed by Bank of Nova Scotia’s $2.5bn five year.

Leads Barclays Capital, BMO, JP Morgan, and HSBC priced the transaction at 76bp over mid-swaps on the back of around $3.5bn of orders. Guidance had been set at the 77bp over area and the issue size was capped at $2bn.

The pricing of 76bp over compares with a re-offer spread of 77bp over for BNS’s deal from Friday, and 135bp over for UBS’s deal.

A syndicate official away from the leads said that the deal was priced too cheaply, but that this was on the back of what he said was cheap pricing for BNS’s deal.

“I think the Scotia was crazy cheap,” he said. “It should have been low to mid-70s.”

He put the equivalent mid-swap level in euros at around 10bp-12bp over for BMO’s deal.

A syndicate official at one of the leads said that the deal was well received. The order books grew quickly upon opening, he said, with investors “piling on” when they saw the momentum in the deal, and they would have continued to grow if kept open for longer, he added.

He suggested that a tighter spread would have been possible, but that the issuer decided against this to leave room for performance and that this was “smart”. The new issue premium was minimal, he said, but there was “something there”.

Around 71 accounts participated in BMO’s issue, according to the syndicate official, with good international distribution. He said that Asian participation in covered bonds has been limited, but that it was positive to see some accounts from the region participating in the BMO transaction.