ANZ launched the longest dated domestic Australian covered bond ever today (Friday), a A$700m (Eu475m, US$635m) 10 year issue that an official at the issuer said extended the market for bank debt in the country.

ANZ Banking Group priced the self-led A$700m 5% August 2023 covered bond at 100bp over swaps, after having gone out with guidance of the 100bp area. The previous day it had sold a A$1.75bn four year senior unsecured debt issue at 85bp over.

A spokesperson for ANZ told The Covered Bond Report that the issuer was very pleased with the result of the covered bond transaction, saying that there had hitherto effectively been no market for bank debt beyond five years in Australia.

Since Commonwealth Bank of Australia opened the local covered bond market in January 2012 there has been no issuance beyond five years. ANZ’s last Australian dollar covered bond issuance was a A$3bn four year deal in March 2012, which was its inaugural domestic transaction and was split into fixed and floating rate tranches.

ANZ’s new issue was the first domestic Australian dollar issue of the year, after Royal Bank of Canada issued a A$1.25bn three year FRN on 30 July. That was the first Australian dollar issue since November 2012, when Suncorp-Metway sold a A$600m five year covered bond.

The ANZ spokesperson said that the 10 year deal was 90% distributed to real money accounts, including asset managers and insurance companies, with banks playing only a minor role.