Resource Items: publications

The following was adapted from an announcement by DBRS:

In a commentary published Sept. 21, Canadian rating agency DBRS has provided a comprehensive review of the Canadian covered bond and residential mortgage markets.

Detailing the history and current status of the covered bond programs established by Canada's five largest banks, the commentary provides in-depth analysis of the residential mortgage market and the liquidity of residential mortgage loans in Canada.

"Covered mortgage bonds have been used successfully in Europe for two centuries, but failed in the U.S. when introduced as farm mortgage debentures in the 1880s. Using firm-level data and a sample of loans made by one Kansas mortgage company, I find that debenture programs grew out of established loan brokerage operations and were used to fund mortgages that were difficult to broker because of size, term or risk characteristics.

Canadian covered bonds are the topic of a reference article by John Mackle in Westlaw Business titled "Covered Bonds: Canadians Do Debt in Europe" (May 26). The article's premise is that with recent Canadian covered bond issues raising billions, "the legal nuances of the covered bond will soon be a topic for discussion in many boardrooms."

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."