02 November 2012 6:43am

Suncorp Bank completed its second covered bond transaction yesterday, The bank will pay 90 basis points over mid swap for the five-year fixed rate issue.

Suncorp Bank treasurer Tim Hughes said in a statement that the issue was upsized from A$500 million at launch to a final $600 million. Hughes said the majority of the bonds were taken up by real money investors (fund managers).

Suncorp's initial covered bond issue in May raised $1.6 billion. That deal was priced at around 140 basis points over mid swap.

Hughes said: "Given the recent contraction in spreads in the...