Singapore’s DBS could issue a debut Australian dollar covered bond, having today (Thursday) announced a mandate for investor calls, amid reported strong non-domestic demand for Australian dollar paper. Westpac NZ will meanwhile go on the road ahead of a potential euro issue.

DBS today announced the mandate for an investor call to be held on Monday (23 May), and said a potential Australian dollar covered bond may follow, subject to market conditions. Barclays, DBS, NAB, RBC and Westpac have the mandate.

The Australian dollar-denominated issue would likely be only the second covered bond in the currency to be launched this year, following a A$400m (Eu258m, C$377m) five year FRN for CIBC on 12 April.

A syndicate official at one of the leads said the deal would benefit from DBS being a well-known name in the APAC region.

“It’s not a heavily supplied market and there is very strong non-Australian demand for Australian dollar assets, from Asia and Japan,” he added. “This deal will be designed to tap into that demand.”

DBS in November held a roadshow ahead of a potential debut sterling-denominated covered bond, but the deal did not emerge, and bankers away from the leads suggested the issuer decided against entering the market because funding levels were not sufficiently competitive versus other currencies.

“The funding levels right now look better for them in Aussie dollars,” said one. “I don’t think they’ll pay up to do this deal – so it’ll either be in line or I don’t think they’ll go ahead.”

DBS in July of last year sold Singapore’s long-awaited inaugural covered bond, a $1bn (Eu887m, S$1.38bn) three year issue. The deal came after the completion of amendments to Singapore’s covered bond framework in June, and was followed by an inaugural, Eu500m (S$775m) five year issue for United Overseas Bank on 2 March.

Westpac NZ yesterday (Wednesday) afternoon announced a mandate for a European roadshow ahead of a potential euro-denominated benchmark issue, commencing on 30 May and concluding on 7 June. JP Morgan, UBS and Westpac have the mandate.

Westpac NZ’s last benchmark covered bond was a Eu500m (NZ$832m) five year priced in September.