DBS launched its first Australian dollar-denominated covered bond today (Tuesday), and only its second covered bond overall, with the benchmark three year FRN having attracted over A$900m of demand as of this morning. The deal is expected to be priced tomorrow.

The debut issue had been expected after the Singaporean issuer yesterday (Monday) held a global investor call.

DBS leads Barclays, DBS, NAB, RBC and Westpac launched the benchmark three year FRN with initial price thoughts of the three month BBSW plus 80bp area. They then announced after the European open this morning that books had reached over A$500m (Eu322m, SGD498m), with the guidance maintained at 80bp area.

The leads then reported the books at over A$900m later this morning, citing strong initial interest from Asia-Pacific and adding that many accounts had yet to revert, and said the deal could be upsized subject to demand and pricing.

The book is expected to close tomorrow (Wednesday) afternoon Sydney time – though the leads said it could close at short notice.

The Australian dollar-denominated issue is only the second covered bond in the currency to be launched this year, following a A$400m five year FRN for CIBC on 12 April.

DBS in July of last year sold Singapore’s first covered bond, a $1bn (Eu891m, S$1.38bn) three year issue. It was followed by an inaugural, Eu500m (S$773m) five year issue for United Overseas Bank on 2 March.