HSBC has received regulatory approval to issue covered bonds out of Canada, becoming the first newly registered Canadian issuer in four years. A HSBC Bank Canada spokesperson told The CBR it will consider issuance in various currencies and formats, also citing Canada’s “best in class” regime.

Canada Mortgage & Housing Corporation (CMHC) – which administers the Canadian legislative covered bond regime – announced yesterday (Monday) that HSBC Bank Canada has been approved “as the eighth participant in the Canadian Covered Bond programme”. HSBC is now listed on the Canadian Covered Bond Registry.

As previously reported, HSBC incorporated a new Canadian covered bond company in December.

“HSBC Bank Canada welcomes the opportunity to participate in the Canadian Covered Bond programme and are happy to have achieved all requisite criteria to participate,” a HSBC Bank Canada spokeswoman told The CBR. “We will incorporate this funding tool into our overall funding strategy.

“The legislative covered bond programme in Canada is a best in class governance framework for the issuance of covered bonds, globally. The legislative nature of the governance framework is appealing to global investors.”

The spokeswoman declined to comment on when HSBC Bank Canada expects to enter the market with its first deal, but said the bank will continue to execute its funding strategy within the context of its overall corporate strategy.

“Participation in the Covered Bond programme provides us the flexibility to consider various currencies, tenors and coupon types,” she added. “An assessment of market prices and conditions along with investor preferences will be the guiding criteria for any future issuances.”

HSBC is the first Canadian issuer to be added to CMHC’s covered bond register since Toronto-Dominion was signed up in June 2014.