Foreign issuers of covered bonds are moving to develop a U.S. covered bond market while proposed legislation to help potential U.S. issuers lags.
Today, Canadian Imperial Bank of Commerce (CIBC) announced its intention to issue a U.S. dollar-denominated covered bond — perhaps later this week.
This announcement comes on the heels of last week’s statement from Germany’s Commerzbank regarding plans for their own U.S. dollar Pfandbrief-style covered bond issue.
One significant point is that issuance in U.S. dollars generally has stronger appeal for U.S. institutional investors than bonds issued in foreign currencies.
While this is a very positive development for exposing the U.S. market to covered bonds in general, it would be much better if U.S. issuers could also benefit from this efficient source of funding — as foreign issuers now appear positioned to do. For that, experts agree that Congressional enactment of a legislative framework for U.S. covered bonds would make a critical difference.
Here’s the story:
http://www.coveredbondinvestor.com/news/cibc-issue-us-dollar-covered-bond