Financial Health and Performance Overview
Canadian Legislative Covered Bonds
CMHC REGISTERED
Canadian Registered Covered Bond Programs' Legal Framework (Canadian National Housing Act)
Canadian Registered Covered Bond Programs Guide issued by Canada Mortgage and Housing
Corporation (CMHC)
Issuance Framework
•
Eligible Assets
.
Uninsured loans secured by residential property in Canada
Mortgage LTV Limits
Basis for Valuation of Mortgage Collateral
Substitute Assets
Substitute Assets Limitation
•
•
LTV limit of 80%
Issuers are required to index the value of the property underlying mortgage loans in the covered
pool while performing various tests
Securities issued by the Government of Canada
Repos of Government of Canada securities having terms acceptable to CMHC
10% of the aggregate value of (a) the loans (b) any Substitute Assets and (c) all cash held by the
Guarantor
⚫ The cash assets of the Guarantor cannot exceed the Guarantor's payment obligations
for the immediately succeeding six months
• Amortization Test
•
Overcollateralization
Cash Restriction
•
Coverage Test
Asset coverage Test
Credit Enhancement
•
Covered bond swap, forward starting
Swaps
•
Interest rate swap, forward starting
•
Valuation calculation
• Reserve Fund
Market Risk Reporting
Covered Bond Supervisory Body
Requirement to Register Issuer and
Program
• Mandatory property value indexation
• CMHC
• Yes; prior to first issuance of the covered bond program
• Monthly investor report with prescribed disclosure requirements set out by CMHC
Investor reports must be posted on the program website
Registry
• Yes
Disclosure Requirements
•
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