The covered bond market took a huge leap forward in projected volume last week, when two new issuers tapped the capital markets for about 5.4 billion ($7.9 billion in financing for residential mortgage portfolios.

Last week, Bank of Montreal (BMO) expected to price a 3.9 billion deal, secured by prime residential Canadian mortgages. When the deal prices, BMO will become the second Canadian bank to complete a covered bond deal. Last October, Royal Bank of Canada became the first, with a C$15 billion ($22 billion).

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