UPDATE: National Bank Of Canada Sells US$600 Million Of Covered Bonds To US Market
February 06 2012 - 4:45PM
Dow Jones News
Montreal-based National Bank of Canada (NA.T) sold US$600
million of triple-A-rated covered bonds in the U.S. credit markets
Monday, according to a person familiar with the deal.
The deal is a reopening of a $1.4 billion, 2.20% coupon deal
maturing in October 2016.
The bonds were priced to yield 1.417%, or 67 basis points over
Treasurys. It was sold 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 Corp., a government agency. They boast top ratings from
Moody's Investors Service, Fitch Ratings and from Toronto ratings
firm DBRS.
The sale was 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 Jan. 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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