Leeds Building Society showed the sterling Sonia-linked market remains open for business in spite of the ongoing Brexit uncertainty, today (Tuesday) attracting some £1.1bn of orders to a £600m four year FRN in a debut executed swiftly while the UK government was meeting behind closed doors.

HSBC, Lloyds, NatWest and UBS opened books for the sterling benchmark four year FRN at around 9.10 London time this morning with guidance of the Sonia plus 67bp area. An hour later they reported books above £750m, excluding joint lead manager interest, and after a further three-quarters of an hour set the coupon at Sonia plus 62bp on the back of books above £1bn, including £50m JLM interest. The final book for the £600m (EUR699m) deal was around £1.1bn good at re-offer, including £50m JLM interest.

Leeds’ deal is the latest deal in a series of UK FIG transactions, including three Sonia-linked covered bonds in the previous two weeks, which have proved largely successful in spite of the inauspicious backdrop of Brexit. On the same day that Lloyds sold the first UK euro benchmark covered bond in six months, 18 March, NatWest issued a £750m four year Sonia debut following UK parliamentary votes that raised hopes that the UK would not, at least, crash out of the EU imminently. Skipton was next to issue a Sonia FRN, followed by Virgin, although the latter trade on 22 March attracted the least demand, in excess of £850m for the £500m five year deal, which nevertheless had pricing tightened 5bp from 75bp area guidance to 70bp over.

“Leeds’ book was somewhere in between Skipton and Virgin,” said a syndicate banker away from the leads, “which is more than acceptable for a name like Leeds, given that it is relatively small and has a relatively modest senior unsecured rating, and hence a smaller potential audience.

“And they still had the ability to move 5bp. It demonstrates that the market is still in good shape.”

Indeed another syndicate banker said that the most impressive aspect of the trade was its timeline, with the issuer announcing and pricing its deal – a debut in Sonia format – by lunchtime the day after the UK parliament again failed to agree on any Brexit plan and with a potential no-deal exit looming.

“People are still able to make pretty swift investment decisions around this product for these sorts of issuers,” he added, “and the asset class continues to demonstrate a very mature status.”

The banker noted that Leeds had completed its deal during what was expected to be a five hour UK government cabinet meeting.

“That was a pretty smart move,” he said. “If they are all locked in a room together having their heads banged together by Theresa May, they are less likely than usual to come out and say something ridiculous.”