The Royal Bank of Canada is preparing to issue a 15 billion ($21 billion) covered bond program to finance a pool of mortgages. The Global Covered Bond Programme represents the first issuance of covered bonds backed by Canadian assets.

Backed by prime-quality mortgage loans originated across the country, the cover pool has a weighted average loan-to-value (LTV) ratio of 70.5%, according to Moody's Investors Service, which gave the bonds a triple-A rating. Established under Canadian law, the rating agency says the program has a lot in common with covered bond programs in the U.K. It does not rely on specific covered bond legislation to get off the ground and continue to operate, and benefits from a creditor-friendly national legal framework.

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