Canadian Imperial Bank of Commerce opened the sterling market with a five year floating rate note today (Tuesday), taking over £250m of orders for a benchmark that was priced at a level tighter than the Canadian issuer would have been able to achieve in euros, according to a lead banker.

The deal is the first sizable sterling FRN covered bond since September, when Bank of Nova Scotia priced a £200m five year at three month Libor plus 38bp, with issuers having since preferred fixed rate issuance when tapping the sterling market.

Leads CIBC, Credit Suisse, HSBC and NatWest Markets (formerly RBS) launched today’s five year FRN with guidance of the three month Libor plus 43bp area, before fixing the spread at 43bp.

The size of the deal had not yet been set when The CBR went to press, but the book was last reported at over £250m (C$414m, Eu293m).

“It’s promising that we got the book covered well,” said a syndicate banker at one of CIBC’s leads. “These sterling transactions can be quite technical in terms of execution, and the investor base is fairly minute, so we’re pleased to get such a good reception and reopen this currency.”

No sterling-denominated deals had been launched in other markets this morning, making CIBC’s the first benchmark in the currency this year.

Bank of Nova Scotia’s September 2021s were quoted today at 36bp, bid, implying that CIBC paid a new issue premium of “the low single-digits”, according to the lead syndicate banker.

He added that the deal had been priced inside where CIBC would have been able to print an equivalent euro-denominated trade.

“Sterling is certainly competitive right now,” he said.

The deal is CIBC’s first benchmark covered bond since July 2016, when it issued a negative yielding Eu1.25bn six year deal.