Thursday, November 20, 2008

New Canadian mortgage bonds coming

(G&M Streetwise) As the Canada Mortgage and Housing Corp. moves to take $75-billion of debt off bank balance sheets, the agency that helps fund the CMHC is rolling out new debt.

The Canada Housing Trust, one of the largest bond issuers in the country, launched its inaugural offering of triple-A rated 10-year Canada Mortgage Bonds (or CMB) on Wednesday. The issue is expected to be priced on Thursday morning.

The new CMB issue will see $2-billion of government-backed debt sold to investors. TD Waterhouse reported Thursday that dealers plan to price the offering 71 basis points over the comparable government of Canada 10-year debt – the 4.25 per cent Canada bonds that mature in 2018. There is huge demand for high-quality debt with a extra yield juice, as investors look for safe places to park cash and find government bond yields near historic lows.

1 comment:

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