Canadian Imperial Bank of Commerce priced the first Australian dollar covered bond of the year, a A$400m (Eu265m, C$393m) five year FRN that CIBC’s Wojtek Niebrzydowski said was a convenient opportunity to keep its name in the Kangaroo market given that it has limited funding needs.

The Canadian bank flagged its interest in returning to the Australian dollar market early last week ahead of an investor update call on Wednesday, which Niebrzydowski, vice president, treasury, at CIBC, said was fairly well attended.

He noted that the issuer had a A$700m maturity at the end of March and this, combined with a relatively benign market backdrop, presented the basis for proceeding with the Australian dollar transaction.

“We had numerous questions asking why didn’t we just come back to euros,” said Niebrzydowski. “Our funding needs are at the moment fairly limited and by doing euros or dollars you are effectively committing yourself to a billion.

“At the same time, we kick-started the Australian dollar covered bond market post-GFC in 2010 – even before the Australian banks themselves could issue on a legislative basis – and we decided that it is one of the markets we want to maintain a periodic presence in.”

The new issue is CIBC’s sixth Australian dollar benchmark covered bond since 2010.

Leads ANZ, CIBC, HSBC and NAB on Monday went out with guidance of the 110bp over three month BBSW area for a A$300m five year floating rate note, and yesterday (Tuesday) priced a A$400m issue at 110bp on the back of over A$530m of demand. Niebrzydowski said that given its limited funding needs CIBC would have been content with a A$300m benchmark size and that an even larger deal would have been possible given that Australian books are fully allocatable.

He said that the pricing was roughly in line with where a US dollar issue may have been priced, and probably a few basis points wider than euros, but reiterated that CIBC’s limited funding needs meant that a euro or dollar benchmark of a billion was not on the table.