Westpac New Zealand is set to become the second bank to issue covered bonds, with the bank mandating four lead managers for a plan to raise up to EUR1 billion. The four lead managers are Barclays, BNP, UBS and Westpac Institutional Bank. Roadshows will begin in the first week of February, said Westpac treasurer Jim Reardon. But the issue won't be launched until the release of Westpac's first quarterly result on February 16. The tenor of the bonds isn't decided yet and will depend on the response at the roadshows. Bank of New Zealand was the first New Zealand bank to issue covered bonds both locally and in Europe. The bank raised EUR1 billion in November via seven-year bonds, pricing it at a spread of 61 basis points over euro mid swap. The euro-denominated covered bond was raised at a much cheaper rate than the local issue and is likely the reason why Westpac has chosen to launch its maiden issue in the overseas market. The Reserve Bank of New Zealand favours covered bond issuances as another means for banks to raise their funds. Itis expected to soon issue a policy governing covered bonds that will limit such issuance to 10 per cent of total assets. Westpac yesterday advised the market of plans to publish a trading update covering the December 2010 quarter on February 15. The bank will also release its pillar 3 quarterly disclosure report that day. The bank told the ASX it would conduct an "audio only webcast", and it is not clear if the bank plans to take questions at this event.