Bank of Nova Scotia and Toronto-Dominion chose differing approaches when launching five year benchmarks today (Monday), BNS printing an “emphatic” Eu1.25bn issue and TD marketing a US dollar. Five Canadians have already entered the market in 2017, with the year expected to be busy for the jurisdiction.

Canadian issuers have since markets opened last week been among the more active in the covered bond market, with CIBC and RBC each selling sterling benchmarks and Bank of Montreal opening the US dollar market with a $1.75bn five year on Wednesday.

Bank of Nova Scotia leads BNP Paribas, HSBC, Scotiabank and UBS launched the BNS five year issue with guidance of the mid-swaps plus 8bp area, before revising guidance to the 5bp area. The deal was then re-offered at 4bp, with the book closing at around Eu1.85bn, before the size was set at Eu1.25bn (C$1.74bn).

“It’s an emphatic deal, taking quite a large size at a very tight spread,” said a banker away from the leads. “It’s the most aggressive deal of the day, and looks like this would have ticked all the issuer’s boxes.”

Bankers away from the leads said the deal offered no new issue premium, seeing BNS September 2021s at 3bp, mid, and March 2023s at 6bp.

Toronto-Dominion is today pricing a five year US dollar issue, having gone out with initial price thoughts of the 60bp over mid-swaps area this morning. The deal is expected to be priced this afternoon after the US open.

“Some of the relative value around the Canadian deals is quite interesting in that BNS’s euro deal is equivalent to a US dollar spread of around the high 60s, while TD are out with a US dollar deal in the same tenor at low 60s,” added a syndicate banker away from the leads said. “Meanwhile, RBC did a £500m last week at 63bp over Gilts, getting quite a good saving versus the alternatives.

“It shows there is a range of levels at which Canadian issuers are currently willing to print transactions, depending on strategic considerations.”

Canada is expected to be one of the busiest jurisdictions in terms of covered bond supply this year, with supply to be driven by high volumes of redemptions – including the established issuers’ legacy structured programmes, most of which will expire this year.

“The Canadians have become one of the most familiar faces in the covered bond market and had a busy 2016,” said a syndicate banker at a Canadian institution. “They’re expected to be at the forefront this year, so it’s been interesting to see five of the six issuers come to market in the first few trading days.”