CIBC saw a post-ECB opportunity to beat an expected January rush and sell a Eu1.25bn three year deal on Monday, according to a treasury official at the Canadian bank, while also selling a strategic Sfr200m deal in a longer maturity than usual to re-establish its name in the Swiss market.

Wojtek Niebrzydowski, vice president, treasury, at CIBC, said the issuer decided to launch its new euro-denominated benchmark this week in order to hit the market ahead of anticipated heavy supply early next year.

“We are led to believe that January is going to be extremely busy,” he said, “so if one can get a deal done on reasonable terms before the end of the year, then why not go ahead?”

Niebrzydowski said another factor in the timing of the deal was a back-up in rates that followed the announcement by the ECB of smaller than expected additional easing measures on Thursday.

CIBC’s deal was the first euro benchmark in the three year maturity since SpareBank 1 Boligkreditt sold a Eu1.5bn three year on 5 November, and syndicate officials said the three year part of the curve had meanwhile been closed for many issuers while shorter-dated covered bonds traded at negative yields.

After the move in rates, CIBC’s new issue was priced with a yield of 0.114%.

“The back-up in rates, in our view, made this shorter-dated issuance possible,” said Niebrzydowski.

Leads CIBC, Commerzbank, HSBC and UBS priced the Eu1.25bn (C$ 1.82bn) three year issue at 9bp over mid-swaps, following guidance of 10bp-12bp over. The book closed at Eu1.8bn.

“It’s an excellent result, especially given the time of the year and if you consider how many recent Eurozone issuances got done thanks to ECB support, which we obviously do not benefit from,” said Niebrzydowski. “Having a Eu1.8bn final book for a Eu1.25bn is a very decent result in December.”

Banks were allocated 51% of the deal, central banks 31%, asset managers 14%, corporates 3%, and private banks 1%. Accounts in the UK and Ireland bought 21%, Germany and Austria 20%, central and eastern Europe 13%, Switzerland 12%, the Benelux 12%, Asia 8%, the Nordics 6%, France 6%, and others 2%.

Niebrzydowski saw the deal as offering a new issue premium of 4bp-5bp, and said that the pricing compared favourably to US dollar levels.

“It is a bit theoretical to compare this pricing level to other currencies, as three years are not available at economical levels in all markets,” he added. “In the other markets we occasionally go to, such as Australia or the UK, I don’t believe investors would have been so receptive to a December transaction.

“The dollar market, meanwhile, has been tricky for most of the year. If we were to have tried a three year in dollars, it probably would have been at least 5bp wider than what was achievable in euros, and the execution certainty would have been much lower.”

CIBC announced the mandate for the new issue on Friday afternoon, after the announcement of US non-farm payrolls, and Niebrzydowski said the issuer had wanted to notify investors early to allow them to get credit work in place, given that CIBC’s last euro covered bond was launched in January.

The Canadian issuer also sold a Sfr200m (Eu184m, C$269m) 10 year issue on Monday. Leads CIBC, Credit Suisse and UBS priced the deal at flat to mid-swaps, with a yield of 0.06%.

“This was more of a strategic transaction,” said Niebrzydowski.

CIBC’s last Swiss franc-denominated covered bond was in February 2012, and Niebrzydowski noted that the issuer had not returned to the market since establishing a legislative programme covered bond programme in June 2013, having sold three benchmarks from its previous structured programme.

“We take the view that we would like to be present in all principal markets that have appetite for covered bonds,” he said. “In that context, we thought it was a good time to re-establish our name and the programme itself in one of the markets in which we chose to be active.”

Niebrzydowski said that CIBC could potentially return more frequently to the Swiss market, but said this depended on the rates environment, with Swiss bonds yielding negative across much of the curve.

“Right now in the Swiss market it is a struggle to do a deal that still provides a small degree of positive yields, while still working in terms of economics in your domestic currency equivalent,” he said. “It is also a bit more challenging because the natural duration of Canadian mortgage books is shorter.

“Ten year issuance isn’t ideal for us, and this is effectively the only market out of all the covered currencies in which we have issued transactions longer than five years.”

CIBC’s deal came after Crédit Agricole Home Loan SFH on Friday morning sold a Swiss franc-denominated Sfr200m long 10 year covered bond. Leads Crédit Agricole, Deutsche and UBS priced the June 2026 obligation à l’habitat deal at 2bp over mid-swaps.

After Monday’s deals, Canadian Imperial Bank of Commerce (CIBC) has sold covered bonds in five currencies this year, having printed a £500m (Eu695m, C$1.01bn) three year FRN in January, a A$300m (Eu202m, C$294m) five year FRN in June and a US$1.2bn (Eu1.1bn, C$1.61bn) five year issue in July.

Niebrzydowski added that CIBC will look to be similarly active next year, subject to market conditions.

“In the absence of any unusual developments,” he said, “I would expect in 2016 a comparable amount of activity from us as the market saw this year.”