DBS Bank priced a A$900m three year covered bond today (Thursday), with the deal split into A$750m floating rate and A$150m fixed rate tranches, and head of wholesale funding Yeoh Hong Nam said the issue reflected its relationship with Australian and Asian investors.

The deal comes after DBS debuted in Australian dollars in May 2016, with a A$750m three year FRN.

“The Australian investor base has always been important to us, and we are keenly appreciative of our reception amongst Australians,” Yeoh told The CBR. “Feedback from investors has also been that an annual issuance would be welcomed and would help keep attention on our curve.

“There is also considerable Australian dollar wallet amongst institutional investors in Asia where we enjoy significant name recognition.”

The Singaporean issuer announced the second three year covered bond transaction earlier this week.

“This transaction tenor worked well for us last May as it caters to bank balance sheets and certain fund management mandates,” said Yeoh. “Our understanding was that a transaction in this tenor would be well received, which turned out to be the case.

“The fixed rate tranche was recommended by the bookrunner team, and I’m glad that we tested the market here as well.”

DBS is understood to have flagged a A$300m minimum size and initial talk of the BBSW plus 53bp area, and leads DBS, ANZ, Deutsche, NAB and RBC today priced the A$900m (Eu603m, US$711m, SGD968m) September 2020 deal split into a A$750m three year floating rate note priced at BBSW plus 51bp and a A$150m fixed rate tranche priced at 51bp over swaps.

“We printed A$750m last year, and were hopeful that we would have a similar reception this year,” said Yeoh. “We were trying to strike a balance between issuer and investor objectives, and I hope that a modest 2bp tightening reflects this.”

The Australian dollar issue comes after DBS sold its inaugural euro-denominated covered bond in January, a Eu750m seven year, with the bank having opened the Singapore market in a $1bn five year in August 2015.

“We have established a presence in most major markets now, but understand that a regular issuance cadence is important for investors,” said Yeoh. “We will try to respond as best we can.”