Bank of Ireland yesterday (Tuesday) priced its fifth covered bond since reopening the public Irish FIG market in late 2012, a Eu750m five year for which the issuer built its highest quality order book since returning, said an official at the bank, who also highlighted the double-digit re-offer spread as an achievement.

The deal was one of three benchmark covered bonds in the euro market yesterday, alongside a Eu1bn 10 year for Spain’s CaixaBank and a Eu500m no-grow for Sweden’s LF Hypotek.

For Bank of Ireland Mortgage Bank’s deal leads BNP Paribas, HSBC, Morgan Stanley, Nomura and UBS collected more than Eu2.2bn of orders to allow pricing at 80bp over mid-swaps, the tight end of guidance of 82bp over plus/minus 2bp, which was revised from the 85bp over area.

That compares with pricing of 190bp over for a Eu1bn five year Asset Covered Security (ACS) that Bank of Ireland priced nearly exactly a year ago, on 15 March 2013, to illustrate the extent of tightening of the issuer’s covered bonds, said Darach O’Leary, head of wholesale funding at Bank of Ireland.

“This transaction represents our first double-digit covered bond print since returning to the market, which is another illustration of the continued progress being made by the bank,” he said. “Our 2017 and 2018 ACS bonds tightened by a couple of basis points post-pricing, which shows that the market is happy with the outcome.”

A lead syndicate official said that at 80bp over, the deal was priced flat to fair value.

Another positive aspect of the transaction, noted O’Leary, is that the leads were able to skip on initial price thought (IPTs) given the strength of indications of interest on the back of the mandate announcement.

“That is more akin to the deal execution process for core covered bonds,” he said. “We received expressions of interest from high quality real money accounts, and that gave us the confidence to go straight to official guidance.”

The mandate was announced on Monday afternoon and included the maturity, although the leads did not communicate a level at that time.

The order book for the issuer’s latest deal is of the highest quality for any of its covered bonds since returning to the market, added O’Leary. One hundred and forty accounts participated in the transaction.

Asset managers took 69%, banks 13%, insurance companies and pension funds 12%, central banks and official institutions 4%, and retail and private banks 2%.

Germany and Austria were allocated 40%, the UK 19%, the Benelux 8%, France 8%, Nordics 7%, southern Europe 6%, Switzerland 5%, Ireland 3%, and others 4%.

Yesterday’s deal came just over a week after Bank of Ireland released its full year results, on 3 March, with the issuer taking stock of the market in the ensuing days and using the positive reaction to its results and good market backdrop to launch the ACS, according to O’Leary.

“We wanted to provide the primary market with some liquidity given the recent tightening of our bonds in secondary,” he said. “The 2019 maturity fitted neatly with our outstanding maturity profile.”

Bank of Ireland priced a Eu750m five year senior unsecured transaction in early January.