Canadian Imperial Bank of Commerce (CIBC) tapped into seasonal sterling flows to sell a £1bn four year Sonia-linked benchmark yesterday (Tuesday), after announcing results last week and ahead of an anticipated busy January for covered bonds and the wider market.

The £1bn (€1.18bn, C$1.68bn) December 2025 new issue, expected rating triple-A, was priced by leads CIBC, NatWest, Nomura and RBC at Sonia plus 28bp on the back of some £1.2bn of demand, following guidance of the plus 30bp area.

“They got decent size at a couple of basis points’ new issue premium,” said a banker away from the leads. “Moving in ahead of January is prudent to ensure that there isn’t a pile-up of issues – well done to them.”

A lead syndicate banker noted that as well as avoiding January supply, the sterling market in December has the added dynamic of heavy Gilt and SSA redemptions and coupon flows.

“This technical inflow of cash into sterling triple-A investors clearly creates a constructive market this month,” he said. “So the evaluation you might make is between printing in December into a quiet market but when perhaps not everyone is open, versus January when everyone will be around but there’ll be an awful lot of competing supply, and you have to consider how attractive you are as a covered bond issuer relative to those other triple-A names, and what kind of disruption they might cause, whether that’s to cross-currency bases or outright new issue concessions.

“So there is a combination of push and pull factors.”

CIBC announced its results last Thursday and the lead banker said the issuer did well to put itself in a position to be able to take advantage of such an opportunity.

“It worked really well,” he said. “At the margin, we went into the deal thinking that we might get £750m done, and it ended up being £1bn, which was a super result.”

He noted that the December technicals helped CIBC attract slightly more demand than did the last sterling floater, a £1bn four year priced at Sonia plus 28bp on the back of a £1.1bn book on 9 November. An upcoming £625m CIBC redemption in January further boosted demand, he added, with investors also having good line availability due to the issuer having tapped sterling less than some international names.

The lead banker put fair value at plus 25bp-26bp, based on DBS’s four year trading at 27bp and Scotiabank March 2025s (the longest Canadian sterling 2025s) at 24bp. He noted that CIBC June 2026s were at 26bp, bid, but said these trade technically tight.

“There was no real attrition to the 2bp spread move from the 30bp to 28bp level,” he added. “If anything, the book went up slightly, as investors appreciated the fact that we were still coming at a pretty attractive level at the 28bp number.

“We had a really high quality book of the most of the folks who you would expect to be involved, a combination of bank treasuries, some central bank involvement, and at the margins, some nice asset management tickets as well, which is mostly to do with folks wanting to kind of park cash.”

CIBC sold a £1.25bn five year FRN in June and the lead banker said yesterday’s four year maturity suited the uncertain rate environment while still allowing the issuer to extend further than its other main option, a three year, would have.

The sterling funding was flat to slightly inside what the issuer might have achieved through a euro or US dollar issue, according to the lead banker.