Canadian Imperial Bank of Commerce yesterday (Wednesday) launched the last euro benchmark ahead of an expected ECB announcement on QE today, and an official at the issuer said that he was pleased with the result in the context of the prevailing market dynamics.

Leads CIBC, Commerzbank, HSBC, Natixis and RBS priced the new issue at 5bp over mid-swaps, following IPTs of the high single-digits and, after Eu1.2bn of interest was registered, guidance of the 6bp area. The deal was sized at Eu1bn on the back of a book of over Eu1.6bn comprising more than 60 accounts.

The 5bp re-offer was 1bp inside where Bank of Montreal priced a Eu1.5bn five year issue on Thursday of last week and, according to a banker at one of the leads, represented flat to 1bp of new issue premium.

Wojtek Niebrzydowski, vice president, treasury, at CIBC, said that he was pleased with the result in the context of coming the day before the expected ECB sovereign QE announcement.

“There is always a question mark how many people on the buy-side would stay away on that day and obviously the supply has dwindled somewhat,” he told The CBR. “So all in all it looks like a very good result.”

The bank’s last euro benchmark, a Eu1bn deal on 8 October, was also a five year and Niebrzydowski said that the merits of coming with another five year were discussed ahead of launch,

“We looked at various options,” he said. “We looked at four years and we looked at something longer – although if you look at our track record we tend to shy away from anything longer than five – but even within the entire continuum of what can be done between four and seven years, the message we were getting for the last few days was that the best demand would still be in the fives.

“Obviously we were aware that we have an October maturity, but ultimately it is apparent that the few months’ extension was received quite well.”

Niebrzydowski said that the market could also clearly absorb three Canadian deals within the space of a week, with National Bank of Canada having on Monday sold a Eu1bn seven year.

“Given the overall expectations of annual supply being flat to going down – which are the concerns you hear at every conference – and there being a pick-up relative to the CBPP3-eligible issuance, we didn’t think that having a couple of other Canadian trades would be an issue,” he said. “We were reasonably confident that the trade should work.”

Banks were allocated 51% of the deal, central banks and official institutions 29%, fund managers 15%, insurance companies and pension funds 3%, and corporates 3%. Germany and Austria took 35%, the UK and Ireland 24%, Asia 13%, the Nordics 9%, eastern Europe 7%, the Benelux 6%, Switzerland 3%, and others 3%.

CIBC’s euro benchmark comes after it on 7 January made its covered bond debut in the sterling market with a £500m three year FRN. Niebrzydowski noted that the bank will be entering blackout at the beginning of February.