Canadian banks head to euro covered bonds in search of liquidity

By Bill Thornhill
19 Mar 2020

Royal Bank of Canada, Bank of Montreal and Toronto Dominion Bank all issued euro covered bonds in good size this week, finding big savings over senior unsecured issuance. One leading investor said bringing these deals in a fragile market was opportunistic and reflected The Bank of Canada's more restrictive provision of emergency liquidity than in Europe.

The European Central Bank and Bank of England have both announced a raft of measures to offer banks liquidity, including access to three and four year funding, and super cheap debt that is eligible for borrowers' Net Stable Funding Ratio (NSFR).

Eurozone banks can also issue retained ...

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