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Craving Canadian Mortgage Investments

Canadian-Mortgage-Investments Foreign and domestic investors alike have been lining up to buy Canada Mortgage Bonds (CMBs).  In the last 12 months, the volume of mortgages funded by CMBs has risen 20%, according to CIBC’s Doug Bartlett.

It’s also noteworthy that investors are no longer demanding abnormally wide yield premiums over 100% safe Government of Canada bonds.

At the last Canada Housing Trust variable-rate auction, for example, demand was twice as large as expected.  $2.4 billion worth of mortgage-backed debt was sold at a meagre 0.18% surcharge over low-risk bankers’ acceptances (BAs).

Even the private sector is having success selling mortgage investments.  Last week, Equitable Group issued $45 million of non-voting stock for $25 a share. That’s rather impressive for a small non-prime mortgage lender in a recovering mortgage market.