Canada

Canadian bank Toronto Dominion has filed a Eu10bn public sector covered bond programme.

Desjardins, Canada’s largest co-operative financial group, is preparing to set up a covered bond programme and Quebec’s financial regulator has outlined an initial position in relation to issuance.

Royal Bank of Canada is expected to price a $1bn minimum five year deal this (Wednesday) afternoon in only the second benchmark covered bond to have been targeted at US accounts since July 2007.

Canadian Imperial Bank of Commerce recently priced a $2bn (Eu1.42bn/C$2.12bn) three year covered bond issue that was the first benchmark targeted at US investors in two-and-a-half years. The Cover spoke to CIBC about the issue this week, with regulatory reporting restrictions on the deal having just ended.

Royal Bank of Canada yesterday (Monday) sold a C$850m (Eu606m/$826m) five year covered bond, which is only the second domestic Canadian issue and comes just days after plans to introduce legislation were revealed in the country’s budget.

The Canadian government is planning to introduce covered bond legislation, according to the 2010 budget published yesterday (Thursday). [Updates yesterday’s news alert to include reaction.]

Canadian Imperial Bank of Commerce priced the first US-targeted benchmark covered bond in two-and-a-half years on Wednesday, a $2bn (Eu1.42bn/C$2.12bn) three year transaction that attracted more than $4bn of orders, and the deal is said to have generated enquiries from European issuers as to what is now feasible in the US.

The first US-targeted benchmark covered bond for two-and-a-half years could be launched as early as today (Monday), with non-US issuers said to be testing whether US investors are ready to return to the asset class.

Standard & Poor’s yesterday (Monday) affirmed a further five covered programmes at AAA under its new covered bond rating methodology, taking the number of programmes that have kept their top rating to 11.

Canadian Imperial Bank of Commerce is in the market today (Tuesday) with the first non-domestic currency Canadian covered bond of the year, a debut, two tranche Swiss franc issue.

Royal Bank of Canada last week demonstrated that there is domestic support for the covered bond product by pricing the first Canadian dollar denominated covered bond launched by a Canadian bank. Such evidence of a domestic investor base should serve to strengthen future covered bond offerings by RBC and its peers in other markets, and may attract international issuers to the Canadian market, bankers told The Cover.

Royal Bank of Canada yesterday (Thursday) became the first Canadian bank to sell a Canadian dollar denominated covered bond when it priced a C$750m five year issue. The transaction has left covered bond bankers in Europe puzzling over RBC’s rationale for the initiative, citing pricing that offered limited savings compared to senior unsecured debt.