National Bank of Canada Issuing $600Mln Of Covered Bonds To US Market
February 06 2012 - 1:31PM
Dow Jones News
Montreal-based National Bank of Canada (NA.T) is issuing $600
million of triple-A-rated covered bonds in the U.S. credit markets
Monday, according to a person familiar with the deal.
The planned deal is reopening of a $1.4 billion, 2.20% coupon
deal maturing in October 2016. It is being marketed in the Rule
144a private-placement market.
Covered bonds offer investors additional safety because payments
are guaranteed, or "covered", by the borrower as well as by a
portfolio of actively-managed mortgages. These bonds are 100%
guaranteed by prime mortgages insured by the Canada Mortgage and
Housing Corporation, a government agency. They boast top ratings
from Moody's Investors Service, Fitch Ratings, and from Toronto
ratings firm DBRS.
The sale is being led by National Bank Financial, Royal Bank of
Canada, and the Royal Bank of Scotland.
National Bank of Canada had $2.4 billion of covered bonds
outstanding as of year-end 2011, according to DBRS.
The Bank of Montreal (BMO, BMO.T) sold $2 billion of 1.95%
coupon, five-year covered bonds to the U.S. bond market on January
23. They priced at 1.987%, or 108 basis points over the Treasury
rate.
-By Patrick McGee, Dow Jones Newswires; 212-416-2382;
patrick.mcgee@dowjones.com
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