Australia’s Westpac is out with the first US-targeted benchmark covered bond of the year today (Wednesday), a five year transaction, while Swedbank is pricing the first euro deal in two weeks and the tightest non-German seven year issue since before the crisis.

Westpac’s deal, in 144A/Reg S format, is being marketed with initial price thoughts of the high 30s over, with Bank of America Merrill Lynch, Citi, JP Morgan, HSBC and Westpac as lead managers. It comes after Westpac sold a Eu1bn seven year issue on 13 March and is the first US-targeted issue since 2 December, when Commonwealth Bank of Australia priced a US$1.5bn five year at 45bp over mid-swaps. Westpac Banking Corporation last tapped the US market in the middle of November, with a $1.5bn five year at 46bp over.

A syndicate official away from Westpac’s deal had yesterday (Tuesday) noted that the US dollar market is offering investors an attractive pick-up over euros, with five year US dollar swaps 90bp back of euro levels, for example.

Swedbank Mortgage, meanwhile, drew more than Eu2.2bn of orders for a Eu1bn no-grow deal this morning. Leads Danske Bank, Natixis, RBS, Swedbank and UniCredit are pricing it at 8bp over mid-swaps, the tight end of guidance of the 10bp over area. The official marketing process started with initial price thoughts of the 12bp over area, which generated more than Eu1.7bn of orders.

At 8bp over, the deal is the tightest seven year non-German euro benchmark covered bond since 2007, according to Tim Skeet, managing director, financial institutions group, RBS.

“Swedbank is very well funded, but had nonetheless been looking at the market for a while and wanted to do a deal that made a difference,” he said. “The optimal point of entry is difficult to choose, but the market looked buoyant this week and the result validates the decision to go ahead with a deal.”

A syndicate official away from the leads said Swedbank had obtained “a great result” with its deal.

“They got a very tight level,” he said, adding that he would be surprised if no further deals hit the euro market this week given very supportive issuance conditions.

A deal from a Swedish issuer after the country’s banks emerged from blackout had been expected for some time, with Swedbank yesterday (Tuesday) afternoon delivering on these expectations by announcing the mandate for its deal. The issuer had needed to finalise an update to its EMTN programme, which happened yesterday, before being able to do so, according to Skeet.

“Announcing yesterday gave investors time to prepare, which is especially important for smaller accounts,” he said.

Today’s deal is Swedbank’s first in over a year, its last visit to the euro benchmark covered bond market having been in April 2013 with a Eu1bn seven year that came at 13bp over.

A banker on today’s deal said that the 8bp over re-offer spread does not incorporate a new issue premium.