NIBC attracted over Eu1.2bn of demand for a Eu500m 10 year conditional pass-through (CPT) covered bond today (Tuesday), that is the longest dated core CPT benchmark issue to date. BNZ has meanwhile mandated for a roadshow ahead of what would be its first benchmark in four years.

The new issue is the third CPT issue from the Netherlands this year, following shortly after a Eu500m seven year issue for Aegon last Wednesday, while Van Lanschot sold a deal of the same size and maturity on 22 March.

After announcing a mandate yesterday (Monday), NIBC leads ABN Amro, Commerzbank, LBBW, NIBC and RBS launched the Eu500m 10 year issue with guidance of the 20bp over mid-swaps area, before revising guidance to the 18bp area. The deal was then re-offered at 17bp, with the book closing at over Eu1.2bn from around 60 accounts.

“It looks a very respectable deal,” said a syndicate official away from the leads. “Eu1.2bn demand is decent, and 3bp of tightening is a good move.”

Some syndicate officials away from the leads suggested that NIBC would have been able to print its deal tighter had Aegon’s shorter-dated issue, which was priced at 14bp, not come first.

Another said, however, that the pricing of Aegon was unlikely to have had any impact on NIBC’s landing point.

“This is about where I would have put an NIBC 10 year CPT anyway,” he said.

Bankers added that fair value for the new issue is difficult to calculate, given that NIBC’s longest outstanding CPT bonds are April 2022s.

Syndicate officials away from the leads suggested that the deal offered a new issue premium of around 5bp, seeing NIBC April 2022s at around 6bp, bid, and Aegon and Van Lanschot 2023s at 12bp-13bp.

They noted that of the three Dutch issuers of CPT covered bonds, NIBC trades the tightest, generally 2bp-3bp inside the curves of Aegon and Van Lanschot.

The deal is the longest-dated CPT benchmark issue from a Dutch or core European issuer and the joint-longest overall, with Italy’s UniCredit having sold a 10 year issue in February 2015.

BNZ International Funding Limited announced a mandate yesterday (Monday) afternoon for a series of European investor meetings to commence on 6 June ahead of a potential euro-denominated benchmark covered bond issue. HSBC and National Australia Bank have the mandate.

The deal will be Bank of New Zealand’s first euro benchmark since 2012, when the New Zealand issuer sold a Eu500m May 2015 issue.

Only one issuer from New Zealand has sold a benchmark covered bond this year, with ASB Finance Limited selling a Eu500m five year on 5 April.

Westpac NZ is expected to launch its first euro benchmark of the year next month, having last week announced a European roadshow that will run from next Monday (30 May) to 7 June.

Bankers said tomorrow (Wednesday) will likely be the last window for euro-denominated issuance until next Tuesday, with some German regions on public holiday on Thursday and the UK closed on Monday.