Apr
17
BMO Bundles Uninsured Mortgages in a Canadian Bond First
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Toronto-based bank is securitizing C$1.96 billion of loans
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Deal comes as Canadian government tries to tame housing market
Bank of Montreal is bundling nearly C$2 billion ($1.5 billion) of prime Canadian mortgages into securities, in a first-of-its-kind deal as the government looks to reduce support for the fast-growing housing sector.
The bonds are backed by prime residential mortgages that are not insured by the government. Canadian banks have historically packaged federally guaranteed loans into bonds, but last year the nation tightened access to taxpayer-backed mortgage backing, in an effort to help tamp down rapid home price growth in areas like Toronto and Vancouver. The mortgage-backed securities offering is the first from a major Canadian bank to bundle uninsured prime mortgages…
BMO Bundles Uninsured Mortgages in a Canadian Bond First
