RLB NÖ-Wien attracted some €2.3bn of demand to a €750m five year covered bond today (Tuesday), in the only euro benchmark so far in this Easter and ECB week, although TD followed up a $2bn five year trade yesterday with a £1bn three year floating rate note.

Following a mandate announcement yesterday (Monday) morning, Raiffeisenlandesbank Niederösterreich-Wien (RLB NÖ-Wien) leads BNP Paribas, Commerzbank, DZ, LBBW and RBI went out with guidance of the 12bp area for a euro benchmark-sized April 2027 mortgage covered bond, expected rating Aaa. After around an hour and a half, they reported books above €1.6bn, excluding joint lead manager interest, and set the size at €750m and the spread at 8bp. By the time books were closed after a total of around close to four hours, the book stood at €2.3bn, excluding JLM interest.

A syndicate banker at one of the leads noted the progression of today’s trade was similar to that of a €750m six year for compatriot Bawag PSK last Tuesday (5 April).

“They’re almost identical up to the moment when final terms were set, with books around €1.6bn,” he said, “and then the same pattern that as soon as investors know what is on the table, they increase their orders or are latecomers, except that they gathered another €1bn or so while we got €700m. It’s easier to buy something when you know what it will look like – nothing wrong with that.

“This put us north of €2.3bn for a €750m trade, which put us in a comfortable position to truly differentiate amongst account participating. I think the issuer was extremely happy, and so were we.”

He put fair value around mid-swaps plus 5bp. According to pre-announcement comparables circulated by the leads, RLB NÖ-Wien August 2026s were quoted at 4bp, mid, and its January 2028s at 5.5bp.

“So at the guidance of 12bp this offered 7bp of new issue concession and at 8bp, 3bp were left on the table. This is in line with what this market has experience recently, while the 4bp move from start to finish is more than Bawag the other day but less than MüHyp, and definitely a very decent outcome.”

MünchenerHyp on Thursday priced a €1bn short eight year green Pfandbrief at plus 2bp, following initial guidance of the 7bp area.

Toronto-Dominion Bank (TD) priced a £1bn (€1.20bn, C$1.64bn) three year floating rate note at 43bp over Sonia today after issuing a $2bn (€1.84bn, C$2.52bn) five year deal yesterday (Monday).

The Canadian sold a €2.5bn five year covered bond on 17 March and the choice of the three year tenor for the sterling FRN was a straightforward choice, according to a syndicate banker at one of leads Barclays, Credit Suisse, NatWest, Standard Chartered and TD.

“They wanted to differentiate it from their perspective, but also from an investor perspective,” he said, “and by going shorter, they were able to max out the size. In the sterling market – that’s where you get the deepest pool of liquidity.

“Investors have not had the opportunity to buy much shorter dated covereds in sterling,” he added. “It’s the first three year sterling since at least the middle of last year, and the first Canadian three year since even longer.”

MünchenerHyp sold a £350m three year Pfandbrief July 2021, but that was a fixed rate deal, and the last three year Sonia covered bond was a £500m issue for Deutsche Pfandbriefbank in January last year. The last Canadian three year sterling FRN covered bond was a £500m deal for CIBC in October 2019 and TD’s last sterling FRN was a £1bn three year in May 2018.

The lead banker put fair value at around 40bp, based on Bank of Nova Scotia 2025 paper, and said the level was equivalent to what TD could have achieved in dollars or euros in the maturity.

“It’s just another example of the Canadians diversifying their funding plans as much as possible by hitting as many different markets as they can,” he added.