ING attracted some EUR3.3bn of orders from more than 120 accounts to a EUR2bn 10 year today (Monday) while CBA sold a EUR1bn 10 year at a minimal new issue premium, as the progressively tighter pricing of new covered bonds continued with few signs of any easing in investor appetite.

ING leads Danske, Erste, ING, HSBC, LBBW, Natixis and Nykredit went out with initial guidance of the 16bp over mid-swaps area for the Dutch 10 year euro benchmark. According to a lead syndicate banker, the initial guidance represented a new issue premium of around 6bp, with ING’s outstanding April 2028s quoted at 9.5bp, mid. A Rabobank EUR2bn 10 year issued three weeks ago was quoted at the same level, while an OP Mortgage Bank EUR1.25bn 10 year sold on Friday was quoted around its re-offer of 10bp over.

Demand topped EUR2bn in an hour and after less than two hours guidance was revised to 13bp+/-1bp, WPIR, on the back of a book above EUUR3bn, excluding JLM interest. The deal was ultimately sized at EUR2bn on the back of more than EUR3.3bn of orders from over 120 accounts, and priced at 12bp over, implying a NIP of 2bp.

A syndicate banker away from the leads described the deal as fantastic.

“I was blown away by the demand,” he said.

A lead syndicate banker said bank treasuries continue to find covered bonds “very attractive” and had come in with large orders, led by German accounts who could achieve a pick-up of 65.6bp over Bunds. He added that the more dovish outlooks of the Fed and ECB and lower supply of higher beta instruments was also prompting more insurance companies to revisit covered bonds.

The new issue premium of 2bp was higher than the flat to negative levels that several issuers have achieved in the past fortnight, but the lead banker noted that spreads had been tightening at an “amazing” rate, with Rabobank’s EUR2bn 10 year having been priced at 15bp over on 24 January.

Commonwealth Bank of Australia (CBA) leads Barclays, CBA, Citi and HSBC went out with initial guidance of the 33bp over mid-swaps area for the Australian 10 year euro benchmark. Books were above EUR1.25bn, excluding JLM interest, after around two hours, and guidance was revised to 30bp+/-1bp, WPIR, on the back of over EUR1.4bn of demand after around two and three-quarter hours. The deal was sized at EUR1bn on the back of books above EUR1.5bn, including EUR55m JLM interest, and priced at 29bp over.

A banker away from the leads put the new issue premium at 1bp. Another noted that the pricing of CBA’s 10 year trade was 4bp through where compatriot National Australia Bank priced a seven year less than three weeks ago.

“That just shows you the incredible performance of covered bonds,” he said.

DekaBank priced a EUR250m no-grow five year public sector Pfandbrief at 1bp over mid-swaps today on the back of some EUR475m of demand. Leads Crédit Agricole, Deka and Deutsche had gone out with initial guidance of the 3bp area and a syndicate banker at one of the leads said the pricing reflected a new issue premium of around 2bp.