Bank of Montreal is launching a €2.9 billion ($4 billion) covered bond program, kicking off with a roadshow in Europe today. BMO follows Royal Bank of Canada’s lead (TS, 9/25) and is the second Canadian bank to launch such a program. Lead arrangers are BMO, HSBC, Morgan Stanley, Société Générale and UniCredit. Osler, Hoskin & Hartcourt and Allen & Overy are counsel to BMO. Officials at Bank of Montreal did not immediately return calls for comment.
The timing of the first deal under the program could not be determined, but market chatter suggests it will be early in 2008. “Nothing else is getting done this year, but we hear that BMO is hoping to get a deal underway early in the new year,” said one covered bond player. Canada’s Office of the Superintendent of Financial Institutions gave Canadian institutions the go-ahead to issue covered bonds in July this year. RBC priced the inaugural issuance from its €15 billion ($20 billion) program in October, RBC Capital Markets and Barclays Capital were lead arrangers on the €2 billion ($2.9 billion) deal.