Interviews

How essential is passage of federal legislation in order to develop a U.S. covered bond market?  If Congress provides a legal framework, how soon might new U.S. covered bonds be issued?  What is the prospective investor base?  Where do the first opportunities lie?

Tim SkeetThose are some of the questions addressed by Tim Skeet — one of the covered bond industry's best-known figures — in this exclusive interview with Covered Bond Investor™.

Asked in a teleconference Monday (Dec. 14) about his measures of success for the hearing on covered bonds set for Tuesday by the House Committee on Financial Services (HCFS), U.S. Congressman Scott Garrett identified at least three:

Canadian Imperial Bank of Commerce (CIBC) took a new direction this month (Dec. 8) when it offered covered bonds denominated in Swiss Francs (CHF). CIBC's CHF 675 million (USD $657.89 million) covered bond issue contrasts with Royal Bank of Canada's (RBC's) decision earlier this year to issue covered bonds denominated in Canadian dollars.

 In an email interview with Covered Bond Investor™, CIBC'S Wojtek Niebrzydowski (VP, Treasury) provided some perspective on the Swiss Franc offering:

Congressman Scott Garrett (R-NJ) recently made headlines in the covered bond world when he proposed an amendment to the Financial Stability Improvement Act of 2009 — currently pending in the House of Representatives — on the topic of covered bonds.  In contrast to legislation Garrett introduced earlier in this term (the Equal Treatment of Covered Bonds Act), the proposed amendment would establish a comprehensive statutory framework governing covered bonds in the U.S.

The Royal Bank of Canada (RBC) made headlines when it became the first Canadian bank to sell covered bonds denominated in Canadian dollars (Oct. 29).  In contrast to earlier series, which were pitched towards Europe, fully 99% of this issuance was purchased within Canada.

RBC's Ken Mason, Senior Manager, Capital and Term Funding, answered some written questions from Covered Bond Investor™ as follows:

Why and when did RBC start thinking about issuing a new covered bond?  

New issues from CIF Euromortgage, Deutsche Pfandbriefbank and Banco Santander Totta (Portugal) ... issuance plans by Eurohypo and Banca Carige ... credit agency views on Spanish banking system and proposed amendments to Swedish covered bond law ... and more.

In late July of this year, Covered Bond Investor™ briefly noted the fact that a French covered bond issuer, CFF (Compagnie de Financement Foncier) had applied to the Securities and Exchange Commission (SEC) for an order exempting CFF from provisions of the (U.S.) Investment Act of 1940 in connection with the offer and sale of its securities in the U.S.

A notice in the Federal Register (July 28) stated: