Bank of Nova Scotia is tapping a £250m three year floating rate note for £300m (Eu384m) today (Tuesday) on the back of a £1bn three year FRN sold by Barclays. Meanwhile, National Bank of Canada has mandated for a European roadshow starting on Monday.

Barclays’ deal reopened benchmark covered bond issuance for 2015.

It had announced its plans on Friday and yesterday (Monday) went out with initial price thoughts of the 20bp over Libor area, with a £1.5bn September 2017 FRN launched by Barclays in September trading at 15bp/17bp ahead of the announcement of the new issue. A syndicate official at one of the leads said that although this widened slightly upon the announcement of the new issue, a re-offer margin of 19bp over for a £1bn size could be achieved for the new deal, with the last book update having put orders at over £1.15bn.

Distribution of Barclays’ new issue was split 85% to the UK, 7% to Switzerland, 7% to other Europe, and 1% elsewhere. Banks and building societies were allocated 56%, fund managers 34%, official institutions 7%, and pension funds 3%.

ABN Amro, Barclays, Commerzbank, Nykredit, Santander and Société Générale were joint leads.

On the back of Barclays’ deal, Bank of Nova Scotia is today tapping a £250m floating rate note that it launched on 28 October. The original transaction was launched following reverse enquiries that arose as the Canadian issuer was selling a Eu1.25bn three year covered bond.

Leads Bank of Nova Scotia, Barclays, Deutsche, HSBC and JP Morgan today went out with a £250m minimum tap of the FRN and are pricing a £300m increase at 18bp over mid-swaps, 1bp inside where Barclays’ new issue was priced.

“It’s a very decent outcome for it to price inside a UK name like Barclays,” said a syndicate official at one of the leads, attributing this largely to the difference in size between the two deals.

Orders for Bank of Nova Scotia’s tap totalled some £500m.

“We’ve clearly had a good reopening on the sterling side,” added the syndicate official. “Pricing is definitely a good bit inside what could have been achieved in this maturity in euros.”

He noted that while euro benchmarks have widened over the past month or so, sterling covered bonds have tightened.

With much of continental Europe having public holidays today, euro activity was again quiet, although yesterday afternoon a mandate for a National Bank of Canada European roadshow was announced. The Canadian bank will hold meetings next week to update investors and a transaction could follow, with BNP Paribas, Commerzbank, HSBC, NBC and RBS working on the exercise.

NBC has issued twice in euros, a Eu1bn five year in December 2013 and a Eu1bn seven year in March 2014. The December 2018 was bid at 3bp over mid-swaps today, according to a syndicate official away from the leads, and the March 2021 at 8bp over.

The last euro benchmark from a Canadian bank was the aforementioned Eu1.25bn Bank of Nova Scotia three year, which was priced at 4bp through mid-swaps in October.