Moody's: BMO Covered Bond Changes - No Adverse Ratings Effect

At the request of the Bank of Montreal (BMO), Moody's Investors Service (Jan. 5) made an announcement regarding BMO's covered bond program in connection with certain amendments to the program's legal agreements that were entered into last month.

Among other things, according to Moody's, the amendments in question tighten cover pool mortgage loan eligibility requirements (requiring insurance from the Canada Mortgage and Housing Corporation) and would permit future issuance of hard-bullet covered bonds.

Moody's stated that it believed "that the amendments did not have an adverse effect on the ratings of the covered bonds," so that the bonds' ratings were not being downgraded or withdrawn.  However, the rating agency did not express any opinion as to whether the amendments could have "other, non credit-related effects" that investors might regard as good or bad.

To read the text of Moody's rating action, first log in (free) at www.moodys.com, then click here.