CIBC’s first euro benchmark in 18 months proved a success today (Monday), as the Canadian issued a €1.25bn five year with a 2bp NIP, as supply proved more modest than expected, even if mandates for Coventry Building Society and DKB were announced and KHFC printed a €650m 3.75 year.

Canadian Imperial Bank of Commerce leads CIBC, DZ, HSBC, Natixis and SG opened books this morning with initial guidance of the mid-swaps plus 40bp area for the October 2029 euro benchmark-sized issue, expected ratings Aaa/AAA (Moody’s/Fitch). They ultimately priced a €1.25bn (C$1.9bn) deal at 35bp, with demand peaking above €2bn and the final book some €1.8bn, including €50m of joint lead manager interest.

Syndicate bankers at the leads put the new issue premium at around 2bp, with fair value seen at 33bp, flat to where the last Canadian five year five year benchmark was trading, a €1bn Desjardins deal issued in May. CIBC’s re-offer spread was flat to where the €2.5bn five year tranche of TD’s record €5.5bn March issuance was trading.

“CIBC hasn’t been seen in quite a while,” said a lead banker. “Meanwhile, we’ve seen tonnes of TD and a little bit of Desjardins. Because TD was supersized and its curve is super-supplied, we felt that fair value for CIBC should be at least a couple of basis points inside.”

CIBC’s last euro benchmark was a €1.5bn four year issue in March 2023.

Another lead banker said overall demand and individual tickets surprised to the upside a little, allowing the issuer to take the €1.25bn size.

“CIBC would have been happy with €1bn,” he added, “but if there wasn’t a basis point cost for an extra €250m, then fine.

“So €1.25bn at a 2bp premium – investors are happy and the issuer is happy, with very smooth execution.”

The deal hit the market early for a Monday morning and the lead bankers said this was done because of rumours of a heavy pipeline and CIBC’s intent to move ahead of any such supply.

“It didn’t feel like there was a huge amount of upside in waiting,” said one of the lead bankers. “The market’s been OK, it’s been accessible – yes, we’ve been seeing positive concessions, but if you’re OK with that, and you don’t want to run the risk of the market moving away from you, then go ahead.”

Korea Housing Finance Corporation’s social bond mandate had been announced on Wednesday, with a maturity of either long three or five years flagged. After a roadshow ending on Thursday, the leads on Friday announced that the South Korean issuer would be focusing on a 3.75 year maturity, with launch expected early this week.

They circulated comparables including KHFC March 2029s at 40, mid, as well as recent non-Eurozone issuance including DBS March 2028s at 24bp, Maybank June 2027s at 22bp, OCBC June 2027s at 20bp, Standard Chartered Singapore May 2024s at 25bp, and TD September 2027s at 25bp.

Leads Crédit Agricole, HSBC, ING, Natixis and SG opened books this morning with initial price thoughts of the mid-swaps plus 42bp area for a July 2028 euro benchmark-sized transaction, expected ratings Aaa/AAA (Moody’s/S&P). After close to around three and a half hours, the leads reported books above €690m, excluding JLM interest, and set the spread at 42bp. Around two hours and 20 minutes later, they set the size at €650m (KRW966bn) on the back of a book above €850m, excluding JLM interest, and the final book good at re-offer was later put at above €810m, excluding JLM interest.

A lead banker noted that KHFC’s investor base and line availability is much more constrained than, for example, CIBC’s, and that, in conjunction with this, spread tightening for its issuance is from the outset not expected to be as great as for more widely taken names. However, he acknowledged that a tighter spread of 40bp had been hoped for.

Mandates for Coventry Building Society and Deutsche Kreditbank hit screens today, while at least two other deals are anticipated in the near future.

Coventry is expected with a €500m no-grow five year issue, having mandated ABN Amro, BBVA, HSBC, NordLB and Santander. The leads circulated pre-announcement comparables including Santander UK March 2029s at 33bp, mid, TD February 2029s at 34bp, and Desjardins May 2029s at 33bp.

Deutsche Kreditbank has mandated a €500m no-grow 10 year social housing covered bond. BayernLB, Commerzbank, NordLB, SG, UBS and UniCredit have the mandate for the mortgage Pfandbrief.

DKB’s outstanding January 2035 social housing issue was at 35bp, mid, pre-announcement, according to the leads, while MünchenerHyp green February 2034s were at 27bp and a variety of other February and March 2034 Pfandbriefe at 30bp-33bp.

“There’s also another core European name rumoured in 10 years,” said a syndicate banker, “and some supply in the middle of the curve, but I don’t expect the issuance that is being discussed to oversupply the market.