LONDON, Oct 5 (IFR) - Export Development Canada is selling the first floating-rate sterling benchmark this year from a Triple-A issuer in the sovereign, supranational and agency space.
Books for the five-year benchmark built steadily through the morning, ending before noon at a final £880m (including £25m JLM interest).
Talk started at 3mL+12bp area, tightened to 11bp area and was then finalised at plus 10bp for a £750m issue size via leads Barclays, RBC and Scotiabank.
“It’s been extremely well received. There was demand from investors for sterling, and the potential [interest rate] hike is putting some focus on this. EDC has ongoing needs in different currencies,” said a lead banker.
Sterling floaters in the sector are rare, meaning there was a lot of pent-up demand. The last deal was a three-year from Ontario (Aa2/A+/AA-) in May.
The pricing looked attractive for investors next to equivalent maturity paper from other Triple A borrowers.
“It looks very cheap versus peers and in EDC terms. This is coming about 7bp or 8bp away from comparables such as the ADB, Council of Europe and EIB,” said a banker away from the deal.
ADB, for example, has Mar 2022 fixed paper trading at swaps less 4bp, according to Thomson Reuters data, which is equivalent to around 3mL+2bp.
This year EDC had sold five bonds, primarily in US dollars.
Its last sterling issuance was in January - a £250m four-year - though last year it priced three deals for a combined £575m. (Reporting by Melissa Song Loong; editing by Alex Chambers and Julian Baker)