CMHC registers 2 covered bond programs

The Canada Mortgage and Housing Corporation has registered two covered bond programs under the legal framework for Canadian bonds.

CIBC and RBC are the first registered programs, and the group says the framework will support financial stability by helping lenders diversify their funding sources and attract more international investors.

“Having met the requirements of the program, CIBC and RBC are now in a position to issue the first covered bonds under the framework,” says Douglas Stewart, interim president and CEO of CMHC.

As the Minister of Finance committed to in Budget 2012, amendments were made to the National Housing Act, which gave CMHC the responsibility for administering a legal framework for covered bonds. Find out more about that legal framework.

Read: CMHC announces covered bond framework

CMHC expects other issuers will come forward, and says it will maintain a public registry of Canadian covered bond programs.

Assets that may be held as covered bond collateral include loans secured by one- and four-unit residential properties located in Canada. Insured mortgages, however, can’t be used as collateral.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.