The U.S. Securities and Exchange Commission (SEC) has granted permission for Royal Bank of Canada (RBC) to issue covered bonds as publicly registered securities in the U.S.
According to a Bloomberg News report, RBC filed documents with the SEC for a mortgage-backed program that may issue up to $12 billion of bonds. RBC's sales will be conducted as private placements and will be restricted to qualified institutional buyers.
‘This development will be viewed positively by the fixed-income market,’ says Ben Colice, head of covered bonds origination at the lender's RBC Capital Markets unit in New York, adding that it will be a ‘positive step forward for the broader prospects’ of establishing a market for U.S. dollar-denominated covered bonds.