Royal Bank of Canada sold its first dollar benchmark covered bond in almost a year yesterday (Tuesday), a $1.75bn (Eu1.35bn, C$1.93bn) five year issue that was the third in the US market after deals for National Australia Bank and Bank of Nova Scotia earlier this month, making for an aggregate $4.5bn.

The flurry of issuance comes after only two US dollar benchmarks earlier in the year, for Westpac and then Commonwealth Bank of Australia in May and June.

Citi, RBC and TD went out with initial price thoughts of mid-swaps plus the high 20s yesterday, then announced guidance of the 27bp area after a strong bookbuilding effort, according to RBC, before fixing the level at 27bp over for a $1.75bn issue on the back of a $2bn order book.

The size compares with $1.25bn for NAB’s issue at the start of the month and $1.5bn for Bank of Nova Scotia, while the pricing of the new issues has been progressively tighter.

“That’s a nice combination to witness,” said a syndicate official at one of the leads.

He noted that the transaction was RBC’s first dollar benchmark of the year and said that there was “clearly pent-up demand”. He said that that, with just over 50 accounts, the book had good granularity and contained high quality accounts.

He highlighted North American demand of 60%, which he said was interesting given that recent supply had seen almost 50% going into Europe, and noted that a 31% share for central banks and other official institutions was high.

Banks meanwhile took 38% of the paper, asset/money manager 24%, insurance companies 5%, and hedge funds 2%. Europe was allocated 25%, Asia 13%, and others 2%.

According to the syndicate official, RBC’s 2018s were trading at around 22bp, while Bank of Nova Scotia priced its at mid-swaps plus 29bp two weeks ago, meaning that any new issue premium was “negligible”. He added that the deal had traded a couple of basis points tighter on the break, “an encouraging performance”, and that the deal had overall exceeded expectations.

RBC was the first issuer to sell its dollar covered bonds off an SEC registered programme and Bank of Nova Scotia is the only bank to have followed this route, with its recent dollar benchmark having inaugurated its SEC registered issuance.