Australia & New Zealand Banking Group (ANZ) became the first non-UK financial institution to issue a Sonia-linked covered bond today (Friday), a £750m three year FRN that attracted some £840m of orders.

After a mandate announcement yesterday (Thursday) afternoon, leads ANZ, Barclays, HSBC, Lloyds and RBC went out with guidance of the Sonia plus 70bp area this morning. Following an update confirming books were above £500m, the spread was after around two and a half hours set at 68bp and the size at £750m (A$1.33bn, EUR830m) on the back of over £770m of demand, including £55m joint lead manger interest. Orders ultimately totalled £840m, including £25m JLM interest.

The pricing compares to Sonia plus 60bp for a £750m three year Lloyds FRN on Monday. According to a banker at one of the leads, the level offered a small saving versus where ANZ might print a new euro benchmark.

He noted that ANZ turned to the sterling market after having sold a EUR1.25bn four year covered bond in November.

The deal is the first Sonia-linked covered bond for a non-UK financial institution, although there has already been Sonia-linked issuance in senior format from non-UK financial institutions.

“It’s a brilliant diversification for them versus euros,” said the lead banker. “And also from an investor perspective – they’ve been buying UK Sonia transactions, but can now look at something more international in a Brexit world.”

“Overall it was a very pleasing result and hopefully a precursor to more issuance from other jurisdictions.”

The deal comes after ANZ’s New Zealand subsidiary on Tuesday issued a EUR750m five year covered bond, and yesterday (Thursday) Westpac New Zealand priced a EUR500m (NZ$850m) deal in the same maturity 1bp tighter, at 32bp over mid-swaps.