Kiwibank is looking at the Swiss franc market with a view to launching an inaugural covered bond transaction after finishing a roadshow in early March, according to a syndicate banker at one of the leads, but no deal is said to be imminent yet.

Barclays and UBS have the mandate for such a deal, which could be the first transaction off the New Zealand bank’s new covered bond programme.

Kiwibank recently set up a NZ$3bn (Eu1.9bn) covered bond programme, which has been provisionally rated triple-A by Fitch and Moody’s.

The programme will be on a contractual basis as New Zealand’s draft covered bond legislation is still going through the country’s parliament.

Kiwibank set up a covered bond guarantor, the Kiwi Covered Bond Trust, and selected loans were transferred to the trust on 19 February in order to establish and facilitate the bank’s covered bond programme.

A syndicate banker away from the leads said that a debut transaction in the Swiss market would suit Kiwibank’s small covered bond programme.