Oversea-Chinese Banking Corporation (OCBC) is set to issue its first benchmark covered bond tomorrow (Tuesday), with the Singaporean issuer having opted for euros after meeting investors and today mandated a Eu500m no-grow five year issue.

The bank’s debut has been pending since it announced a mandate on 24 February for a European roadshow, ahead of a benchmark issue that it said would be denominated in either euros or US dollars, have a mid-term maturity, and be in Reg S format.

OCBC announced a mandate this morning for a Eu500m no-grow five year issue, via leads Barclays, BNP Paribas, Crédit Agricole, JP Morgan and OCBC. Bankers at the leads said the deal will be launched tomorrow, subject to market conditions.

The issuer in November established a $10bn (Eu9.4bn, SGD14bn) global covered bond programme, and speculation that a deal was imminent increased after it joined the Covered Bond Label initiative in February.

OCBC will become the third covered bond issuer from Singapore, following DBS Bank and United Overseas Bank (UOB). Both have issued euro benchmark covered bonds this year – DBS a Eu750m seven year on 16 January and UOB a Eu500m five year on 22 February. UOB’s deal, of the same size and tenor as OCBC’s forthcoming issue, was priced at 10bp and this morning quoted at 6bp, mid, pre-announcement.

“There has been good performance in UOB’s recent five year, and we have seen consistently good demand for Singaporean paper,” said a banker. “That bodes well for UOB, and given the limited size of Eu500m I certainly don’t think they’ll have any struggles in finding demand.”

Syndicate bankers at the leads also cited as comparables UOB’s March 2021s, seen at 5bp, and DBS’ January 2024s at 14bp, as well as 2022 paper from Australian issuers ANZ, CBA, NAB and Westpac, all at minus 1bp.

UOB issued a $500m three year tranche alongside its Eu500m five year covered bond, with bankers noting that, accounting for the different maturities, the pricing achieved on each was roughly equivalent.