DBS achieved what is understood to be the biggest order book for a Singaporean sterling covered bond on Monday, attracting more than £2.2bn of orders to a £1bn three year floating rate note, with the issuer’s and jurisdiction’s regular presence in the UK market cited as contributing to the success.

Leads DBS, BMO, HSBC, NAB, Santander and TD opened books on Monday morning with guidance of the Sonia plus 57bp area for the sterling benchmark-sized October 2028 FRN, expected ratings Aaa/AAA (Moody’s/Fitch). After around an hour and 40 minutes, they reported books above £1.6bn, including £250m of JLM interest, then after around three hours, they tightened 5bp to set the spread at 52bp and the size at £1bn (€1.15bn, SGD1.74bn) on the back of books above £2.2bn. The final book was above £2.2bn, including £200m of JLM interest and 49 accounts.

A banker at one of the leads said the book is the largest ever for a Singaporean sterling covered bond, with strong demand from real money accounts across the UK and Europe complementing the traditional UK bank bid, and support from APAC accounts also in evidence.

The sterling benchmark is DBS’s fourth – its debut, a £1bn four year deal issued in November 2021, matures next month.

“Coming in with the new deal gives them a longer point on the curve and maintains their sterling presence at the level they want it to be,” said a banker at another of the leads. “They’ve been pretty clear that they’re committed to being a regular issuer in the sterling market.

“My understanding is that they have some natural sterling needs for their corporate loan book, so while they are obviously going to be looking to get the best pricing possible versus what is available in other currencies, investors like the fact that they have those needs.”

Aside from a limited £300m Korea Housing Finance Corporation debut on 30 September, the last non-UK covered bond issuance in the three year maturity was from Canadians CIBC and Bank of Nova Scotia on 5 and 8 September, respectively, with their £1.25bn and £1.5bn deals priced at 55bp and 54bp. Those were seen at around 51bp when DBS approached the market.

“So this basically pried on top of fair value,” said the lead banker. “We have generally seen more and more investors looking at DBS and Singapore in general now that there has been more supply.

“When you get a new investor on board in this market,” he added, “they’ll look at the Canadians and the Australians, which tend to be the core group of non-UK sterling issuers that people do credit work on. But Singapore is now getting firmly entrenched in that as well.”

DBS’s last sterling benchmark was a £1bn three year in May 2024, while the last Singaporean sterling benchmark was a £750m three year from United Overseas Bank (UOB) in September 2024.

The new issue was seen as offering pricing flat to inside what might have been achieved in euros, according to lead bankers, and inside US dollars.

DBS’s deal takes non-UK sterling supply to more than £5bn since the beginning of September, when new issuance restarted in earnest after the UK authorities in July released proposals that put foreign covered bonds back on a firmer footing. The volume even greatly exceeds the one deal for £600m in non-UK sterling covered bond supply that preceded the regulatory uncertainty sparked by the PRA in April.