New Zealand’s ASB sold a Eu500m seven year deal at a level deemed almost flat to secondaries today (Tuesday), having opted for a tighter spread over a larger size. Cariparma is set to sell a dual-tranche OBG tomorrow, and Ibercaja will roadshow its first benchmark cédulas since 2010.

Before ASB’s deal today, the last euro benchmark covered bond from New Zealand was for ANZ NZ on 13 September, a Eu1bn seven year issue priced at 12bp over mid-swaps.

ASB Finance leads BNP Paribas, Commonwealth Bank of Australia, HSBC and UBS launched the new seven year issue this morning with guidance of the 15bp over mid-swaps area. The leads then revised to the 13bp area, plus or minus 1bp will price within range, and indicated that the deal would be sized at Eu500m-Eu700m, on the back of over Eu750m of orders. The spread was then fixed at 12bp and the size at Eu500m.

“It went very well,” said a syndicate banker at one of the leads. “ASB are one of the smallest New Zealand issuers, and to take the same price as ANZ New Zealand – which is by far the biggest bank in New Zealand – is a good outcome, albeit for a smaller size.”

He said the decision to size the deal at the smaller end of the indicated range did not mean final demand had disappointed.

“The issuer had a price or size decision, and ultimately they went for the former,” he said. “They don’t have massive borrowing requirements, so I guess optimising the funding cost was more important.”

Syndicate bankers at and away from the leads said the deal offered a new issue premium of around 1bp, seeing ASB Finance April 2021s at 8bp, mid, and ANZ NZ September 2023s at 9bp.

The lead syndicate banker said the premium was consistent with that of a Eu750m seven year issue for National Bank of Canada that on 22 September was priced almost flat to the issuer’s secondary curve.

“It’s a very low premium,” said the lead syndicate official. “Like NBC, it shows there is a real price/size break for doing sub-Eu1bn trades.

“By limiting their size ambitions, ASB also achieved a price very close to their curve.”

Bankers away from the leads also said that ASB Finance had done well to match ANZ NZ’s spread and to price with such a slim premium.

“The final spread is exactly where I would have priced them,” said one. “The books are in good shape and it’s an all-round healthy trade, which shows how constructive the covered bond market continues to be.”

The deal is ASB Finance’s second euro benchmark covered bond of the year, following a Eu500m five year issue in April. Prior to that, the New Zealand issuer’s last benchmark came in October 2013.

ASB Finance is owned and guaranteed by ASB Bank Limited, a subsidiary of Commonwealth Bank of Australia.

After completing a European roadshow yesterday (Monday), Cariparma this morning announced a mandate for a dual-tranche, September 2024 and September 2031 euro covered bond offering. BayernLB, Crédit Agricole, LBBW, Lloyds, Mediobanca, Natixis and UniCredit have the mandate. The deal is expected tomorrow, subject to market conditions, according to a syndicate banker at one of the leads.

The deal will be Cariparma’s third benchmark obbligazioni bancarie garantite (OBG). The Italian Crédit Agricole subsidiary sold a debut Eu1bn January 2022 issue in December 2014, and last came to the market in September 2015, when it sold a Eu1bn June 2023 issue.

The last benchmark covered bond from Italy was a Eu1bn 10 year issue for UBI Banca that was priced at 19bp over mid-swaps on 5 September.

Syndicate bankers at the leads saw Cariparma’s January 2022s and June 2023s at 16bp, bid. They also cited as comparables 2026 paper from fellow Italian issuers Intesa Sanpaolo, UBI and UniCredit at 16bp-17bp, and March 2023s from Intesa at 7bp.

Ibercaja Banco announced a mandate this morning for a seven year euro benchmark cédulas hipotecarias, which is expected to be launched following a European roadshow. Crédit Agricole, Commerzbank, HSBC and Natixis have the mandate.

The deal will be Ibercaja’s first benchmark cédulas since 2010, when it sold a Eu500m April 2015 issue.

“This is their first benchmark in a long time, hence the roadshow,” said a syndicate official at one of the leads. “But they did issue a Tier 2 transaction in July 2015 – so they do have some presence in the markets.”

Banco Sabadell sold the last benchmark covered bond from Spain on 2 June, pricing a Eu1bn eight year at 40bp over mid-swaps.