Royal Bank of Scotland (RBS) is readying its first benchmark covered bond in five years, having today (Wednesday) announced a mandate for a roadshow next week ahead of a potential euro and/or sterling issue.

Any deal would be RBS’s first benchmark covered bond since January 2012, when it sold a £1bn (Eu1.18bn) 12 year. Its last euro benchmark was a Eu750m five year in November 2011.

The UK issuer announced today that it has mandated its NatWest Markets arm as global co-ordinator and BNP Paribas, Commerzbank, Danske Bank and NatWest as joint lead managers to arrange a European roadshow commencing on Tuesday.

A euro benchmark seven year and/or three year sterling benchmark covered bond offering is expected to follow, subject to market conditions. A syndicate banker at one of the leads said the roadshow is expected to run until Friday and that the deal could emerge the following week.

“We are going to try to be as broad as possible with the investors we hit,” said the lead syndicate banker. “We want to look at both euros, being the deepest pool of liquidity – i.e. the seven year – while also focussing on the home currency with the three year sterling.

“It looks like there has been a lack of supply in that market, and we felt this is the right name for people to take advantage of that.”

There have been seven benchmark sterling covered bonds sold this year, but only one from the UK – a £1bn three year for Lloyds on 9 January – and only one since the first two weeks of market activity – a £250m short five year for Toronto-Dominion on 23 March.

There have meanwhile been only two euro benchmarks from UK Issuers this year, the most recent having been a Eu500m seven year for Yorkshire Building Society on 3 April that was priced at 10bp over mid-swaps.