Toronto-Dominion Bank (TD) sold its first euro benchmark covered bond in two years yesterday (Thursday), a €2.5bn five year deal that took this week’s supply to €8.1bn, while Royal Bank of Canada (RBC) raised $1.5bn with a five year dollar benchmark.

TD leads Commerzbank, Crédit Agricole, LBBW, Lloyds, Rabobank and TD priced the €2.5bn (C$2.10bn) March 2027 issue, expected ratings triple-A, at 11bp over mid-swaps on the back of some €2.9bn of orders, following initial guidance of the 14bp area.

TD’s last euro benchmark was a €1bn four year issue in March 2020. Yesterday’s deal is the bank’s largest euro benchmark.

It chose the five year maturity tapped by four of its compatriots in January and the beginning of February, while Canadian supply this month shifted to the four year part of the curve.

A syndicate banker at one of the leads said that the deal attracted the strong demand despite some accounts having in the past week indicated they were full on Canadian credits – year-to-date issuance from the country is €16.75bn, some 26% of total euro benchmark volumes in 2022 and higher than supply from any other jurisdiction.

The lead banker said that, as with several recent deals, the leads moved directly from guidance to the final spread to give clarity to investors, which helped boost the final order book.

The 11bp re-offer level compares with 9bp achieved by RBC on a shorter, €2bn four year deal on Tuesday that attracted some €2.3bn of orders, while Canadian five year issuance in the start of the year’s calmer and tighter markets was priced at 5bp-6bp over. A syndicate banker away from the leads put TD’s new issue premium close to 5bp, in line with other deals this week.

On top of this week’s €8.1bn of euro benchmark supply, Natixis Pfandbriefbank on Wednesday priced a €250m mortgage Pfandbrief at 2bp over mid-swaps, following initial guidance of the 5bp area and with the final book above €390m, including €50m of joint lead manager interest.

RBC priced its $1.5bn (C$1.90bn, €1.36bn) five year Reg S/144A trade at mid-swaps plus 65bp yesterday, in the middle of IPTs of the 65bp area and on the back of some $1.55bn of demand. The pricing is flat to where Singapore’s DBS issued a $1.5bn five year on Thursday of last week (10 March).