DBRS Comments on Latest Issuance of RBC Covered Bonds

DBRS has today commented on the latest AAA-rated issuance (Series CB3 or the Series) from the EUR 15 billion Royal Bank of Canada Global Covered Bond Programme (the Programme).

The Series is the first covered bond issuance by a Canadian financial institution after a period of inactivity of more than one year. It has a principal amount of $750 million and is issued under the Programme and qualified for distribution in Canada under prospectus supplements filed under the Programme’s short-form base shelf prospectus dated September 23, 2009. After issuance of the Series, the total Programme outstanding amount is approximately $5.5 billion, which is supported by a collateral pool of $11.6 billion Canadian prime residential mortgages (as of September 30, 2009), representing 110% of overcollateralized assets. This percentage is well above the required minimum 7% based on the current asset percentage of 93%.

It is DBRS’s understanding that this is the first Canadian covered bond issuance purchased predominantly by Canadian investors. DBRS considers this to be a positive step for Canadian covered bonds as investors in Europe have commented to DBRS on the importance of establishing a domestic investor base for the development of a robust Canadian covered bond market.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Covered Bonds: DBRS’s Rating Approach (to Canadian Issues), which can be found on our website under Methodologies

This is a Structured Finance rating.

MEDIA CONTACT
Caroline Creighton
Senior Vice President, Communications
+1 416 597 7317
ccreighton@dbrs.com