ANZ pays up for covered bonds
ANZ paid a seemingly high price to sell covered bonds in the US bond market last week.The bank sold US$1.5 billion of three-year covered bonds priced at 61 basis points over mid-swaps and US$750 million of covered three-year floating rate notes priced at 61 bps over Libor. ANZ also sold US$750 million of unsecured, five-year bonds priced at 135 bps over US Treasury bonds.Given that the ANZ's domestic March 2016 covered bonds were marked at 64 bps over swap at the end of the day before the issue, the pricing on the US covered bonds hardly seems like a bargain. The basis swap would take the spread to around 100 bps over swap.The amount paid by ANZ may explain the heavily over-subscribed order book and the level of Australian participation in the deal.ANZ National, meanwhile, sold NZ$200 million of five-year bonds last week. Pricing was not disclosed.