A second US dollar benchmark from HSBC Bank Canada, launched on Tuesday, attracted well over double the number of investors involved in its debut, following marketing efforts by the issuer and despite the $1bn three year trade coming on the busiest ever day in the dollar market.

After a roadshow for a three year 144A/Reg S US dollar benchmark running from Tuesday of last week (27 August), leads HSBC, BMO, CIBC, Commerzbank, DZ, ING, LBBW, Natixis and RBC went out this Tuesday morning with initial price thoughts of the 37bp over mid-swaps area and ultimately priced the transaction at 35bp over following revised guidance of 37bp+/-2bp, will price in range. The deal was sized at $1bn (C$1.32bn, EUR903m) on the back of a final book of over $1bn, following a peak of $1.2bn.

The deal is HSBC Bank Canada’s second benchmark, following a $750m three year trade in November 2018, which was sold at 33bp over mid-swaps, and it comes after a C$2.5bn increase in the size of the issuer’s covered bond programme to C$6bn this summer.

“On their first deal, they had below 20 investors and this time round it was just under 50,” said a syndicate banker at one of the leads. “This is a testament to the work they’ve done since their debut to ensure that investors had credit line availability in place.

“Upsizing by $250m was further testament to the quality of the book,” he added. “And we were able to save a couple of basis points off the price, coming in at plus 35 over mid-swaps, so this was a double win for issuer.”

The leads noted that the book was more granular and diverse than the issuer’s previous benchmark. North America was allocated 33%, continental Europe 18%, Asia 14%, the Nordics, UK and Ireland 13%, and the Middle East 6%. Banks and private banks took 48%, official institutions 33%, fund managers 16%, and insurance and pension funds 5%.

The lead banker said the overall sponsorship the transaction received was a “superb result,” on what was the busiest ever day in the US dollar market, in terms of number of transactions (21), and that this was partly assisted by the issuer’s execution strategy of announcing the deal at the London open.

“Rather than waiting for the US open, this had a beneficial effect both on the distribution into the European market as well as their ability to get sufficient traction against the busy calendar elsewhere,” he said.

Comparables circulated by the leads put HSBC Bank Canada’s November 2021s at 24bp over.

“We were seeing more recent Canadian paper in this part of the curve as being in the context of 30bp, which put fair value in the context of 33bp, so a new issue concession of zero to two basis points,” said the lead banker.

He added that the transaction had benefited from relatively limited dollar covered bond supply over the course of the 2019.

Another lead syndicate banker said that the dollar transaction was launched with four objectives for the issuer.

“It wanted to secure cost-effective funding, diversity its investor base, establish another reference point on the dollar curve, and demonstrate commitment to the covered bond market,” he said, “and I think they’ve done that job pretty nicely.”