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Nationwide Hires Banks for First Covered Bond Sale Since 2012

June 17 (Bloomberg) -- Nationwide Building Society is planning its first sale of covered bonds in 2 1/2 years after the cost of raising the debt fell to a record in Europe.

The U.K.’s biggest customer-owned lender hired Barclays Plc, Citigroup Inc., UBS AG and UniCredit SpA to arrange an issue of the notes in euros, according to a person familiar with the matter. The average yield on the securities declined 11 basis points this month to an all-time low of 0.94 percent, Bank of America Merrill Lynch index data show.

Issuers of covered bonds, which were pioneered in 18th-century Prussia and are backed by mortgages and public sector loans, are taking advantage of demand for the debt amid a second year of net negative supply. Belfius Bank SA/NV and a unit of Groupe BPCE sold almost 2.5 billion euros ($3.4 billion) of covered bonds yesterday, taking the total so far this month to 9.5 billion euros, according to data compiled by Bloomberg.

Nationwide is gauging interest in a new deal as it returns to debt markets after using the Bank of England’s Funding for Lending Scheme, according to Clare Crowley, a spokeswoman for the Swindon, England-based lender.

Westpac Securities NZ, a unit of Australia’s Westpac Banking Corp., is selling 750 million euros of covered bonds today, according to a person with knowledge of the transaction.

To contact the reporter on this story: Alastair Marsh in London at amarsh25@bloomberg.net

To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net Jennifer Joan Lee, Michael Shanahan

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