National Australia Bank is taking orders for a five year US dollar benchmark covered bond that is set to be priced after the US open today (Wednesday), while Swedbank is pricing a five year fixed rate sterling issue, in the first benchmark covered bond supply in a week.

National Australia Bank (NAB) leads HSBC, NAB, RBC and TD launched the five year 144A issue this morning with initial price thoughts of the mid to high 60s over mid-swaps. The deal will be priced after the US open today.

The deal is NAB’s second US dollar-denominated benchmark this year, following a $1.4bn (Eu1.32bn, A$1.87bn) five year issue in March that was also the last Australian benchmark in the currency. The March 2021 issue was seen at 60bp, bid.

A syndicate official at one of NAB’s leads also cited Westpac February 2021s at 59bp, and a range of 2021 paper from Canadian issuers at around the same level.

“That Australian/Canadian covered bond suite are all indicated between 57bp and 60bp,” he said.

The new issue is the first benchmark US dollar covered bond since 4 October, when Korea Housing Finance Corporation priced a $500m five year issue. Prior to NAB’s new issue, some market participants had suggested that the Korean deal could be the last in US dollars this year, given that market activity was winding down towards the year-end.

The lead syndicate official said he was nonetheless confident that the deal was achievable.

“We’ve made it publicly known that there some lead orders in there as well that have given us even more confidence,” he added.

No update is expected on the size of the order book until after the US open.

NAB has sold one other benchmark covered bond this year besides its dollar issuance, a £450m (Eu528m, A$749m) five year on 4 November.

Swedbank Hypotek leads Credit Suisse and Swedbank launched the Swedish issuer’s five year fixed rate issue this morning with initial price thoughts of the 65bp over Gilts area.

Sterling covered bond supply has been limited since the UK’s EU referendum. Although Santander UK quickly reopened the market with on 1 July, a week after the vote, only £1.9bn of public issuance has been sold in the second half of the year.

The last benchmark was NAB’s fixed rate issue on 4 November.

“It’s not the most liquid market, so in terms of valuation you just mark your deal off the last one,” said a syndicate banker away from Swedbank’s leads. “Going off NAB’s trade, this price looks about right.”

The Australian bank’s November 2021 issue was priced at 63bp over mid-swaps and quoted at re-offer this morning.

Swedbank’s last sterling benchmark covered bond came in October 2015, a £350m (Skr4bn) three year floating rate note.