Westpac's benchmark covered bond issue
Westpac returned to the US s144A market to issue US$1.75 billion of five-year covered bonds last week. The bonds were priced at mid-swaps plus 35 basis points.Westpac issued US$1.5 billion of five-year covered bonds in the same market last November. The spread at that time was set at 46 bps over mid-swaps.Allowing for the basis swap, this latest issue will swap back to Aussie dollars at around 70 bps. National Australia Bank paid 80 bps over swap on 10-year covered bonds issued in the domestic market in March.While issuing the covered bonds, Westpac (rated AA-) also sold unsecured fixed and floating rate notes totalling US$1.25 million each. The notes were priced at 33 bps over swap/Libor.NAB also made a small €65 million issue of five year covered bonds, priced at 18 bps over Euribor. This would swap back at around 65 bps.Commonwealth Bank (rated AA-) added €400 million to its February 2019 line, to take the total outstanding to €1.0 billion. The increase was priced at mid-swaps plus 35 bps, 20 bps tighter than when the line was opened in late January.