Market Commentary: CMHC Outlines CMB Issuance Plans

  • Paul Uffelmann, Vice President, Capital Markets

Earlier this week, CMHC announced Q1 CMB issuance targets of $12.5bn (up from $8.5bn) and $7bn (up from $6bn), for 5yr and 10 yr respectively. This is in line with expectations and is a good outcome for the market with most of the increase going to the 5yr, consistent with current borrower preferences. We anticipate the rest of the year will follow a similar issuance pattern.

CMHC appears to be committed to maintaining large, regular 10yr issuance, which is important to maintain the investor base and will be invaluable when the curve inevitably flattens, and borrower preferences shift back to longer terms. The near-term challenge will likely be finding sufficient 10yr collateral.  

We are still hoping to hear that the $9bn annual NHA MBS guarantee pricing threshold is increased (or abolished), but this is a good outcome in and of itself.

Your First National representative is ready to discuss these changes and help you discuss your options, including 5yr vs. 10yr. Enjoy the rest of your week!

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