CBA went for size today (Wednesday) as it took out a large chunk of an order book of some €1.5bn to print a €1.25bn eight year euro benchmark, while CCDJ is in the market with a five year US dollar benchmark in the wake of Scotiabank’s $3.5bn record-breaker, and pbb is planning a three year dollar.

After a mandate announcement yesterday (Tuesday), Commonwealth Bank of Australia (CBA) leads Barclays, BNP Paribas, CBA and UBS went out this morning with initial guidance of the mid-swaps plus 13bp area for the eight year euro benchmark, expected rating triple-A. Some three hours later they set the spread at plus 10bp on the back of books above €1.35bn, and the size was ultimately set at €1.25bn (A$1.99bn) on the back of some €1.5bn of demand.

“Setting the spread early on was a smart move if the size was always the important thing on that transaction,” said a banker away from the leads.

Another said the trade was solid, but “not exuberant”.

“I don’t think it was a major gate-crasher,” he said. “People do know that CBA can do sizeable transactions and with names like this, starting with a benchmark wording leaves some fantasy on the table with regards to final size.

“This may have hampered the dynamics a bit, but in any case, it was a decent trade and it’s good to see the Aussies back, no doubt about it.”

The syndicate bankers put fair value at around plus 8bp, implying a new issue premium of 2bp – off the lows achieved by recent supply.

CBA’s new issue is only the third Australian euro benchmark covered bond since the Covid-19 pandemic hit financial markets last year, with National Australia Bank and Westpac having raised €850m and €1.75bn, respectively, this June and September. CBA’s last euro benchmark was a €1.25bn 10 year over two years ago, in February 2019.

Two issuers are approaching the US dollar market in the wake of the biggest benchmark covered bond in the currency on Monday, a $3.5bn (C$4.4bn, €3.02bn) five year for Bank of Nova Scotia (Scotiabank, BNS).

Fédération des caisses Desjardins du Québec (CCDJ) is following in the five year maturity today. Leads Barclays, Crédit Agricole, DZ, Goldman Sachs, RBC and UBS announced the mandate and opened books this morning European time with initial guidance of the mid-swaps plus 19bp area for the 144A/Reg S October 2026 dollar benchmark, expected rating triple-A. The final terms had not been set by the time The CBR went to press.

Scotiabank’s five year was priced at 17bp over mid-swaps.

Deutsche Pfandbriefbank (pbb) is planning a three year Reg S dollar mortgage Pfandbrief, expected rating Aa1, with Citi, Credit Suisse, HSBC and Nomura having the mandate. The deal will be the German’s second dollar benchmark of the year, following an earlier $750m three year in January.