DBS Bank will on Friday set out on a roadshow ahead of a potential debut sterling-denominated covered bond, it was announced today (Wednesday), with the Singaporean bank eyeing the UK market after having inaugurated the city state’s legislation in July.

A $1bn (S$1.4bn, Eu910m, £649m) three year issue for DBS in July, which was priced at 37bp over mid-swaps, opened the Singapore market after the completion of amendments to the country’s covered bond framework in June.

Barclays, DBS Bank, Deutsche Bank and Société Générale have the mandate for the sterling roadshow, which will run until early next week. A syndicate official at one of the leads said the investor meetings would be focussed in the UK.

“They will be exploring the sterling option and seeing if a deal would be of interest to investors,” said the syndicate official. “There is no guarantee that a deal will follow.”

A syndicate official away from the leads said it would be difficult to estimate fair value for the potential new issue with no direct comparables, but said the deal would likely be priced wider than sterling deals from established UK, Canadian and Nordic issuers but inside of those from Deutsche Pfandbriefbank, which he said was priced as a more challenging credit in the UK market. He noted that the most recent sterling benchmark, a £350m three year FRN from Swedbank that was priced at 38bp over three month Libor on 21 October, was now trading at around 37bp over. Deutsche Pfandbriefbank September 2017s were trading at around 50bp over, he said.

Sterling issuance this year has been dominated by floating rate notes, with the last fixed rate benchmark having been a £500m seven year issue for Lloyds in March.

Market participants expect Singapore’s United Overseas Bank (UOB) and Oversea-Chinese Banking Corp (OCBC) to join DBS in issuing covered bonds.