Bloomberg: Canadian Covered Bonds "Poised to Quicken"

A news story for Bloomberg by Chris Fournier (April 26) paints a rosy picture of covered bonds' future prospects in Canada.

The story comes in the wake of major covered bond issues marketed to U.S. investors this year by Canadian Imperial Bank of Commerce (CIBC) and Royal Bank of Canada (RBC), as well as the Canadian government's recent announcement of plans for specific covered bond legislation.

Among other things, Fournier's article notes that Canada's second-largest bank, Toronto-Dominion, is taking steps (announced April 21) that could lead to issuing covered bonds (but "no immediate plans").

There are also implications that future Canadian covered bonds might eventually find buyers in China, since the China Banking Regulatory Commission this month designated Canada as a destination for Chinese banking wealth management business.

Fournier quotes a CIBC executive as praising covered bonds' "flexibility to reach so many new sets of buyers and jurisdictions." 

Currently, Canada's covered bond market totals about $15.2 billion, according to figures cited in the Bloomberg story.