Yorkshire Building Society launched its first sterling covered bond since 2012 today (Friday), a £500m five year Sonia-linked FRN that was priced at the same level at which peer Coventry on Tuesday issued a similar trade that was the first five year from a financial institution to be linked to the benchmark.

Yorkshire announced on Monday that it had mandated HSBC, NatWest, Santander and TD for a five year Sonia-linked trade to follow investor meetings, and shortly afterwards Coventry Building Society mandated Barclays, Natixis and Lloyds for the same maturity and format.

Coventry then entered the market the next day (Tuesday), issuing a £500m (EUR574m) five year trade on the back of a £770m book. Pricing was set at 60bp over Sonia, following initial price thoughts of the 65bp area and guidance of the 62bp area, plus or minus 2bp, which a banker away from the leads said represented a new issue premium of 3bp-5bp.

Coventry’s trade was the first from a financial institution in the Sonia format in the five year part of the curve. Previous five year Sonia-linked issuance had been limited to SSAs, with the only two previous bank trades having been three year covered bonds from Lloyds and Santander UK.

Yorkshire then entered the market this morning, achieving the same pricing as its peer on the back of a £650m-plus book, following IPTs of the 63bp area.

“All in all this was a very strong return for Yorkshire,” said a syndicate banker at one of the leads.

Yorkshire’s last sterling covered bond was a £500m four year floating rate note in March 2012 and it had no remaining sterling covered bonds outstanding before today. Its last benchmark covered bond was a EUR500m six year in April 2017.