Toronto-Dominion Bank today (Friday) attracted Eu2bn of demand for a Eu1.25bn seven year covered bond despite a Bloomberg terminals outage this morning, with a lead syndicate official saying the blackout significantly slowed execution but did not have a big impact on the outcome.

Leads BNP Paribas, Deutsche, SG and TD launched the Eu1.25bn (C$1.64bn, US$1.34bn) seven year deal with initial price thoughts of the 1bp over mid-swaps area.

“When the outage hit, we already had quite a strong book,” said a syndicate official at one of the leads. “Given that it was Friday and there wasn’t much else on, and that we were told everything should be back online around lunchtime, we thought ‘you know what, we still have a chance’.”

The lead syndicate official said the book continued to grow through the blackout, adding that the leads sent an update before lunchtime to confirm that the deal was going ahead and that the IPTs were still valid.

“Then the books exploded when Bloomberg came back online,” he said.

More than two hours after the books were opened, the leads set guidance at 1bp through, after having taken IOIs of Eu1.1bn. The re-offer was then set at 2bp through on the back of Eu1.9bn of orders.

The lead syndicate official said TD’s secondary curve suggested fair value for the new issue was around minus 7bp. However, noting that BMO January 2020 paper and CIBC January 2020s – both five year deals – were trading at minus 7bp, mid, he said the real fair value was arguably closer to minus 5bp.

A syndicate official away from the leads agreed, saying he saw fair value at around minus 5bp-4bp, noting that Toronto-Dominion October 2021 paper was trading at minus 4.5bp, mid, while RBC August 2020s were at minus 6.5bp.

“I think because they are 20% risk weighted they need to offer a bigger pick-up than some recent non-Canadian deals we have seen, but this is a good result for them,” he said.

“With the problems with Bloomberg, I was really worried about this deal,” he added. “Especially considering the circumstances, I’m impressed with the result.”

Another syndicate official away from the deal put fair value for the new issue at around minus 2bp-minus 1bp, noting that NBC 2022 paper was trading at minus 4bp, bid.

Meanwhile, another banker away from the leads criticised the pricing, irrespective of any Bloomberg problems, adding he felt the leads would have been able to print tighter had the deal not been launched on a Friday, and that the deal should possibly have been postponed. Seeing Dutch NIBC 2022 paper trading at minus 7bp, mid, he said the deal was “very cheap”.

“Toronto-Dominion are one of the big guys,” he said. “NIBC are a good issuer but they are smaller and they will have less credit lines. On a clear day, if they issued at the same time, TD should print tighter. To be so far back of NIBC is a poor result for them.”

The lead syndicate official disagreed that the timing of the execution was wrong, citing the “extremely good quality” of the order book as proof of the deal’s success.

“I think the technical issues and the Friday launch had no substantial negative impact,” he added. “Most of the accounts we expected to participate were involved.”

The lead syndicate official said the rationale behind the Friday launch was to avoid going out at the same time as other anticipated deals next week, and to execute before more potential bad headlines regarding Greece.

He said the deal was also helped by its announcement at 17:30 CET yesterday (Thursday) afternoon.

“We talked about whether it was still worth announcing, but the feedback we got was helpful and it gave a heads-up to some Asian accounts,” he said. “That helped a lot. I’d say we got a good substantial two or three tickets from Asian investors. Things could have been more difficult today without them.”

The issue is the first euro benchmark from a Canadian issuer since CIBC on 21 January priced a Eu1bn five year at 5bp over mid-swaps. TD’s most recent covered bond issuance was a £500m three year deal sold on Thursday of last week (9 April), which was preceded by a $1.75bn five year on 26 March. Its most recent euro benchmark was a Eu1bn seven year issue priced in November 2014.

Meanwhile, bankers said they expected more issuers to come to market early next week.

“Issuers will be tempted looking at the outcomes of this week’s deals,” said a syndicate official, citing in particular the success of LF Hypotek and La Banque Postale.

“Next week there is a very clear window. I think we will see issuers creeping in to get deals done.”

A syndicate official said in particular that some Nordic issuers were eyeing the dollar market ahead of possible deals to be launched after leaving blackout periods.