Westpac impressed yesterday (Thursday) by taking $1.7bn of orders for a $1.35bn five year covered bond at the same time as being able to tighten pricing from IPTs of the 100bp area, although the issue still represented the widest print in US dollars since 2012.

Westpac Banking Corporation leads Citi, HSBC, Toronto-Dominion, and Westpac announced the 144A/Reg S five year issue on the European open yesterday morning with initial price thoughts of the 100bp over mid-swaps area.

After the US open, guidance was set at 100bp plus or minus 2bp, will price within range, before the spread was fixed at 98bp. The deal size was set at $1.35bn (Eu1.21bn, A$1.89bn), with the book closing at around $1.7bn.

“I’m very impressed by the total size of the books and the size they managed to take out of the market,” said a syndicate official away from the leads. “Getting that kind of volume done and managing to tighten the spread makes this a very good print.

“It’s a very good print that should put dollar covered bonds on the table for this type of international issuer. It’s good to at least have other markets open to take some of the supply pressure off euros.”

The deal is the widest priced benchmark dollar covered bond since November 2012, when ING priced a $1.5bn December 2022 issue at 98bp. Syndicate officials said this reflects a widening of spreads in recent months, noting that Westpac’s last dollar issue, a $1bn five year, was priced at 80bp on 2 November.

Seeing the November 2020 issue at around 92bp, bid, the syndicate officials said fair value for the new issue was around 95bp.