Westpac is in the market today (Monday) with the first covered bond to be priced with reference to SOFR mid-swaps, a five year 144A/Reg S benchmark, while in euros, NIBC is due with a €500m nine year CPT, after Berlin Hyp uncovered over €1.25bn of demand for a €250m August 2026 tap today.

Westpac Banking Corporation’s new issue is its first benchmark covered bond in US dollars since a $1.75bn (€1.53bn, A$2.39bn) five year launched in January 2020, and the first dollar supply since 7 October, when Deutsche Pfandbriefbank and Fédération des caisses Desjardins du Québec issued $750m three year Reg S and $750m 144A/Reg S benchmarks, respectively.

The deal has been marketed at a spread of SOFR mid-swaps plus 46bp, and is the first covered bond to be priced with reference to the new rate, although it has been used in other dollar sectors, such as SSAs.

The new issue had not been priced by the time The CBR went to press.

NIBC is expected to hit the market tomorrow (Tuesday) with a €500m no-grow nine year conditional pass-through (CPT) covered bond via Commerzbank, DekaBank, DZ, ING and NatWest.

The mandate announcement today comes shortly after it emerged that the Dutch issuer is considering following its peers in establishing a soft bullet covered bond programme. A syndicate banker at one of the leads said the issuer has noted that the soft bullet programme increases its options and that “it is definitely not shelving altogether” its CPT programme.

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, with the lead banker putting fair value at 8bp-9bp, “depending on how you twist the curve”.

The last Dutch euro benchmark was a €500m 15 year soft bullet debut from Achmea on 22 September, which was re-offered at 8bp and today trading at 6bp-6.5bp, mid, according to a banker at one of its leads.

Berlin Hyp attracted over €1.25bn of demand to a €250m no-grow tap of its 0.01% August 2026 mortgage Pfandbrief today, with syndicate bankers seeing the strong demand for the shorter dated paper as indicative of investor defensiveness amid rates volatility.

Leads Commerzbank, DekaBank, HSBC, UBS and UniCredit went out with the tap this morning, setting the spread at mid-swaps minus 4bp at the outset. After around 35 minutes, they reported books above €500m, including €85m of joint lead manager interest, with the books set to close 20 minutes later. The final book was above €1.25bn, including €85m of JLM interest.

“This is another clear indication that interest is there,” said a banker away from the leads, “especially at the short end of the curve.”

Another banker agreed that such defensive trades were finding favour among investors, noting that a €1.5bn 15 year social bond for Dutch agency BNG had gone less well than expected today. He also contrasted the Berlin Hyp tap with a €250m tap of a €500m October 2031 MünchenerHyp Pfandbrief on Wednesday that was priced in the middle of plus 2bp+/-1bp guidance and not oversubscribed.

“There are definitely issuers who want to do deals,” he added, “but the long end moves have kind of spooked people a bit.”