Laurentian Bank of Canada has received approval from the Canada Mortgage and Housing Corporation to establish a $2 billion legislative covered bond program.
The bank said that this step is in accordance with the Canadian Registered Covered Bond Programs Guide, as published by CMHC.
Through the program, Laurentian Bank may occasionally issue covered bonds “under such terms and conditions as determined by Laurentian Bank at the time of issuance and in accordance with prevailing market conditions.”
Any issuances under the program “will be in accordance with the requirements specified by the Office of the Superintendent of Financial Institutions for covered bond programs of federally regulated financial institutions, including that the total assets of the financial institutions pledged for covered bonds must not represent more than 5.5% of the issuer’s on-balance sheet assets,” the bank added.
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Laurentian Bank is filed as a “registered issuer” in CMHC’s registry, pursuant to Section 21.51 of Part I.1 of the National Housing Act (Canada). The covered bond program is also recorded in the registry.
“We are pleased that CMHC has approved Laurentian Bank as a registered issuer and has registered our program under the Canadian Registered Covered Bond Program,” said Rania Llewellyn, president and CEO of Laurentian Bank. “[Our] covered bond program is going to help further diversify our funding sources, reduce our cost of funding and help us deliver competitively priced products to our customers.”