Lloyds Bank built the largest order book ever for a sterling floating rate covered bond yesterday (Tuesday) when selling a £1bn (Eu1.2bn) three year issue, according to a lead banker, with syndicate officials away from the trade welcoming what they saw as a strong transaction.

Leads Lloyds, RBS, Standard Chartered and UBS priced the three year Regulated Covered Bond at 30bp over three month Libor, the tight end of guidance of 30bp-32bp over, which followed initial price thoughts of the low to mid-30s over.

Orders totalling £1.6bn were placed for the FRN, which was the first UK sterling covered bond since June 2012 and the largest such deal since March 2012. A banker on the deal also said that it is the largest fully syndicated sterling three year FRN to date.

“The transaction was extremely well received by investors as demonstrated by the high quality order book of £1.6bn,” he said.

Bank treasuries accounted for the majority of demand, taking 69% of the bonds, followed by fund managers with 26%, and others with 5%.

UK investors were allocated 93%, the rest of Europe 4%, and others 3%.

A syndicate official away from the leads welcomed the pricing of a UK covered bond in sterling and said that the level Lloyds achieved was “very decent”, with another noting that a jumbo-sized print in sterling was an achievement not easily replicated and that the pricing was “on the tight side”.