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Several amendments to H.R. 5823 — the latest version of covered bond legislation in Congress — were added to the bill during the markup session of the House Financial Services Committee (HFSC) before the HSFC voted to report the bill to the House floor.

• A four-page amendment from Rep. Melissa Bean (D-IL) provides for a system of joint regulation by a variety of entities instead of oversight by a single regulator.

To download a PDF of the Bean amendment, click on "20100728 bean" under "Attachments," below.

Bank of Nova Scotia (BNS) kicked off its covered bond program on July 15 with a three-year, U.S. dollar-denominated covered bond in the amount of $2.5 billion, under its US $15 billion covered bond program.  The Prospectus (dated July 19) set forth legal terms establishing the program.

This useful fourteen-page report from the Congressional Research Service was written by Edward V. Murphy, a specialist in financial economics.  Here is the table of contents:

Definitions

Policy Issues

"Skin in the Game" and Underwriting

Transparency and Investor Confidence

Capital Requirements and Lending Volume

Maturity Mismatch

July 22, 2010 saw the introduction of a new version of proposed covered bond legislation — H.R. 5823 — to supersede a previous version (H.R. 4884) with the same title, the "United States Covered Bond Act of 2010."  While similar in many ways to the previous version, H.R. 5823 also presents some significant differences.

To download a PDF (31 pages) of the full text of the new bill, click on "H.R. 5823" under "Attachment," below.

This eight-page legal document (released July 5, dated June 25) contains the contractual terms and other information regarding the second U.S. dollar-denominated covered bond issue of Canadian Imperial Bank of Commerce (CIBC), in the amount of $1.25 billion, under its €8 billion Global Public Sector Covered Bond Program.  The bonds are not offered to any U.S. person or address in the U.S. except to Qualified Institutional Buyers.

Canadian Imperial Bank of Canada (CIBC) priced its second Swiss Franc-denominated covered bond on June 2, 2010.  This two-page public announcement from rating agency DBRS (June 30) describes the basis for the agency's rating of AAA for that 500 million Swiss Franc issue. 

To download a PDF of "DBRS Assigns Rating of AAA to CIBC Covered Bonds, Series CB6," click on "20100630 DBRS CIBC CHF" under "Attachment," below.

The final shape of the financial services reform bill — a compromise between versions previously passed separately by the U.S. House of Representatives and the Senate — will be determined by a House-Senate conference committee comprised of members from both chambers.  On June 22, the House conferees voted to include covered bond provisions as part of the compromise version they would like the Senate side to agree with.

This eleven-page legal document (dated June 8) contains the contractual terms and other information regarding Bank of Montreal's (BMO) US $2 billion dollar covered bond issue (priced June 2) under its new €7 billion covered bond program. The bonds are not offered to any U.S. person or address in the U.S. except to Qualified Institutional Buyers.

Bank of Montreal (BMO) recently (June 6) became the third Canadian bank to issue a covered bond denominated in U.S. dollars.  This prospectus constitutes the legal underpinning for BMO's €7 billion covered bond program.  The prospectus is not intended for distribution to any U.S. person or address in the U.S. except to Qualified Institutional Buyers.

The Association of Danish Mortgage Banks represents financial institutions subject to Danish legislation that "use sources of funding such as covered bonds (SDOs), covered mortgage bonds (SDROs) and mortgage bonds (ROs) to grant loans against mortgages on real property."