DBRS Publishes Update on Canadian Covered Bond and Residential Mortgage Markets

In a commentary published today, DBRS provides an update on the Canadian covered bond and residential mortgage markets. In addition to highlighting the current covered bond programs established by large Canadian financial institutions, the commentary examines the residential mortgage market and the liquidity of residential mortgage loans in Canada.

“The Canadian covered bond programs consist entirely of prime residential mortgages and most of them are insured by Canada Mortgage and Housing Corporation,” says Kevin Chiang, Senior Vice President. “Therefore, a key factor in DBRS’s assessment of Canadian covered bond ratings is a thorough understanding of the residential mortgage market and its liquidity, in addition to an analysis of the issuers and the legal framework and environment.”

The commentary also investigates how, during the recent financial crisis, insured mortgages, mostly through sovereign-sponsored National Housing Act Mortgage-Backed Securities and Canada Mortgage Bonds, became an important funding source and provided systemic support and liquidity to Canadian mortgage markets and lenders.

A copy of this commentary is available by contacting us at info@dbrs.com.