NIBC attracted a peak book above €1bn for a €500m no-grow nine year CPT today (Tuesday) at a minimal NIP, which lead bankers saw as a solid result against a weak backdrop. Danske’s Finnish arm is expected with a €500m five year tomorrow, while Westpac yesterday priced $1.75bn fives.

After a mandate announcement yesterday (Monday), NIBC leads Commerzbank, DekaBank, DZ, ING and NatWest opened books this morning with initial guidance of the mid-swaps plus 13bp area for the €500m no-grow November 2030 conditional pass-through (CPT) issue, expected ratings triple-A. After an hour and 45 minutes, they reported books above €850m, including €45m in joint lead manager interest. After two hours and 35 minutes, guidance was revised to 10bp+/-1bp, will price in range, on the back of books above €1bn. With orders still above €1bn at the revised guidance, the spread was ultimately fixed at 9bp. The final order book was €940m, including unchanged JLM interest.

The benchmark covered bond is NIBC’s first since it recently emerged that the Dutch bank is considering establishing a soft bullet covered bond programme, while peers NN, Achmea and Aegon have only issued soft bullet benchmarks rather than conditional pass-throughs (CPTs) since similarly establishing new programmes in the past 18 months.

“Conditional pass-throughs are always a bit tricky, as not every investor likes it, and it has become a bit of a rare breed,” said a syndicate banker at one of the leads. “But we had all the guys involved that we expected should play a role ahead of the transaction. There was of course some spread sensitivity, but it’s a very decent level of oversubscription.”

“And it’s not bought by the Eurosystem,” he added, “so there’s no political shading in a CPT orderbook, which probably makes it even better than the numbers alone suggest.”

Another lead banker said NIBC’s deal stood out in a weak market.

“If you look at the other deals today, away from covered bonds, they have struggled a bit to get the book together and they have paid a bit of a new issue premium,” he said. “We had around a billion in the book and decent pricing at plus 9bp, which is about 0.5bp NIP.

“We did a deal for NIBC earlier in the year as well, when we had a bigger book, but I think that’s a bit of a reflection of broader sentiments,” he added.

NIBC’s €500m 10 year CPT in April attracted a peak €1.75bn and final €1.35bn of demand.

The lead bankers put fair value for the new issue at around 8.5bp. According to pre-announcement comparables circulated by the leads, NIBC January 2028s, September 2028s and April 2031s were quoted at mid-swaps plus 8bp, mid, while its October 2029s were at 8.5bp.

Danske Mortgage Bank plc (Finland) is planning a €500m no-grow five year covered bond, which is expected to hit the market tomorrow (Wednesday), following a mandate announcement today. BNP Paribas, Danske, DZ, Erste and ING have been mandated as leads.

The new issue will be the Finnish arm of Danske’s first since January 2020, when it issued a €1bn eight year.

Westpac priced a $1.75bn (€1.53bn, A$2.38bn) five year 144A/Reg S trade at 45bp over SOFR mid-swaps yesterday, in the first benchmark covered bond to be priced with respect to the new US dollar reference rate.

The deal was priced at 45bp following guidance of the 46bp area. A banker away from the leads said the SOFR re-offer spread was equivalent to 22bp over Libor mid-swaps.

Canadian five year benchmarks issued in September and October were priced at 17bp-18bp over Libor mid-swaps, and the banker said that, with Aussies typically trading 2bp-3bp wider than Canadians in US dollars, he would have expected the pricing to be 1bp-2bp tighter.

Westpac’s pricing versus SOFR mid-swaps comes after issuers in other sectors, such as SSAs, have already tested the market with the new pricing reference, and the banker suggested the dollar market was well advanced in progressing towards the new rate, but that – unlike in the UK with respect to Sonia – not every investor might yet be as prepared as issuers would prefer.

“The $1.75bn size tells you it’s a good outcome,” he said, “but maybe they didn’t have the critical mass needed to tighten.”