Italy’s Banca Carige accessed the public bond market for the first time in over two years with a five year OBG today (Thursday) that catered to yield-hungry investors, with New Zealand’s ASB Finance also out in euros and CIBC tapping the Australian dollar market.

The Carige mandate was announced yesterday (Wednesday) morning and although the issuer and leads were keeping their options open in terms of the timing of a transaction they proceeded to launch a deal this morning, with the US Congress finally passing a bill to raise the debt ceiling and avoid a potential default, and markets opening strongly.

“Market tone has been extraordinarily resilient over the past few days, and the US matter was the last thing that would have hindered anyone,” said a banker.

A syndicate official on Carige’s deal said that market conditions deteriorated somewhat from earlier in the morning, but without affecting the issuer’s transaction.

Carige’s obbligazioni bancarie garantite (OBGs) are rated Baa1 by Moody’s, on review for downgrade, and BBB+ by Fitch, on negative outlook. Moody’s downgraded the issuer from Ba2 to B2 on 18 September and today’s deal is thought to be the first public euro covered bond from a single-B rated issuer.

“The deal could pave the way back to public market access for other weaker rated southern European covered bond issuers,” said Maureen Schuller, head of covered bond strategy at ING Bank.

Carige last accessed the benchmark covered bond market in March 2011.

Leads Barclays, Deutsche Bank, Natixis, Raiffeisen Bank International, RBS, UBS and UniCredit went out with initial price thoughts (IPTs) of the high 200s before setting official guidance at the 275bp over mid-swaps area.

They will price a Eu750m five year deal at 270p over after building an order book of around Eu1.4bn, according to a lead syndicate official.

“Carige got a success after recent press attention around the credit,” he said. “It’s a very nice transaction and could lead to better headlines.”

A senior unsecured transaction would not have been a viable option, he added.

Another lead syndicate banker said that BTPs were at around 163bp over, and Carige November 2016 OBGs at 243bp over.

Carige’s deal is the fourth Italian benchmark covered bond since last Monday (7 October) as issuers away from the country’s national champions made the most of an accommodating primary market.

A syndicate banker away from the Carige deal said it shows “the hunt for spread”.

“Anything with a bit of fat on it is going to attract attention,” he said.

Pricing of 275bp over compares with a re-offer spread of 215bp over for a Eu750m five year OBG debut for Banca Popolare dell’Emilia Romagna (BPER) launched last Tuesday, and 150bp over for a Eu750m 10 year inaugural issue for Mediobanca last Thursday.

BPER is rated BB- by Standard & Poor’s and BB+ by Fitch, and its OBGs Baa2 by Moody’s. Mediobanca is rated BBB by S&P and its OBGs A.

Meanwhile, ASB Finance is out with a five year euro issue, the second New Zealand benchmark covered bond this year and the issuer’s first since June 2012.

Leads Barclays, BNP Paribas, CBA and UBS gathered more than Eu500m of orders for the deal and will price it at 25bp over mid-swaps, in line with guidance of the 25bp over area. Initial price thoughts were in the mid to high 20s over.

A lead syndicate official said the deal worked well, and said it offered a low to mid- single digit new issue premium, with a Eu500m five year covered bond for ANZ National from the middle of September trading at around 20bp over. The deal was priced at 23bp over.

ASB Finance is a wholly owned subsidiary of Commonwealth Bank of Australia.

Canada’s Canadian Imperial Bank of Commerce (CIBC) is out with a Kangaroo covered bond, a long three year that leads CIBC, HSBC, NAB and UBS marketed with guidance of 52bp-55bp over three month BBSW. The issue met with an “excellent domestic response”, with A$500m (Eu352m, C$496m) of orders already having been placed during Australian trading, according to a syndicate official at one of the leads, and Asian and European interest due on top of that.

The last Kangaroo covered bond was a A$1.25bn three year from Royal Bank of Canada at the end of July, which was priced at 53bp over.

HSBC SFH yesterday priced a Eu1bn seven year obligations de financement de l’habitat (OH) at 14bp over mid-swaps, the tight end of guidance of 16bp over plus/minus 2bp. The final orderbook totalled Eu2.7bn with more than 130 accounts participating.

Germany and Austria were allocated 40%, Benelux 14%, Nordics 14%, UK/Ireland 10%, France 9%, Asia 8%, Italy/Switzerland 3%, and others 2%. Fund managers took 42%, banks 35%, insurance companies and pension funds 14%, and central banks and official institutions 9%.

ABN Amro, Banca IMI, BBVA, Erste Bank, HSBC, Natixis and Swedbank were the lead managers.