Canadian Mortgage Broker News - Canada Mortgage Bonds grow under the radar

Canadian Mortgage Broker News - Canada Mortgage Bonds grow under the radar


Canada Mortgage Bonds grow under the radar
Friday, 29 January 2010
The CMHC-backed Canada Housing Trust issued $47 billion worth of mortgage bonds in 2009 - the biggest issuance in the Canadian marketplace last year, according to a story in The Financial Post.
The growth is another sign of success for the Canada Mortgage Bonds program, which was launched in 2001 as a way for financial institutions to sell some of their mortgages to the government for liquidity and to lower borrowing costs. The program has proved popular among both financial institutions and investors, the Post said.
"Investors have responded extremely well to the safety and security of Canada's mortgage market as well as the AAA backing from the Canadian government," Doug Bartlett, managing director and head of government finance for CIBC World Markets, told the Post.
The five-year bonds are still the most popular product in the CMB program, but the 10-year bonds have also done well since being introduced to the market in November 2008, with a total of $9.2 billion being sold as of December. Despite the high numbers, CIBC executive director Warren Lovely told the Post the program is "very mature" after the explosive growth it has experienced in the past few years.