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Market Developments

Securitization Activity in Canada. Market Developments. Allan Tomas, Chief, Financial and Wealth Accounts. November 2 nd 2009. Phase I: inception, NHA MBS Phase II: moderate growth, IABS Phase III: strong growth, traditional assets Phase IV: strong growth, layering and synthetic

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Market Developments

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  1. Securitization Activity in Canada Market Developments Allan Tomas, Chief, Financial and Wealth Accounts November 2nd 2009

  2. Phase I: inception, NHA MBS Phase II: moderate growth, IABS Phase III: strong growth, traditional assets Phase IV: strong growth, layering and synthetic Phase V: credit crunch, no growth except for NHA MBS (strong growth) Evolution of activity in Canada Statistics Canada • Statistique Canada

  3. National Housing Act Mortgage Backed Security (NHA MBS) Program Investment Dealer Debtors Canada Mortgage and Housing Corporation guarantee may sell NHA MBS principal and interest principal and interest principal and interest Central Payor and Transfer Agent NHA MBS Lending Institution Investors proceeds Statistics Canada • Statistique Canada

  4. Traditional asset-backed security transaction: using a Special Purpose Entity/Vehicle (SPE/SPV) Proceeds Statistics Canada • Statistique Canada

  5. Total financial assets of Issuers of Asset-Backed Securities Statistics Canada • Statistique Canada

  6. Securitized mortgages Statistics Canada • Statistique Canada

  7. Securitized consumer credit receivables Statistics Canada • Statistique Canada

  8. Securitized commercial loans and leases Statistics Canada • Statistique Canada

  9. Non credit market financial assets of Issuers of Asset-Backed Securities Statistics Canada • Statistique Canada

  10. Outstanding debt of issuers of asset backed securities Statistics Canada • Statistique Canada

  11. Shutdown in Asset-Backed Commercial Paper (ABCP) market Increase in NHA MBS issuance Government policy reaction: Insured Mortgage Purchase Program Phase V: Financial crisis & credit crunch Statistics Canada • Statistique Canada

  12. In Canada, the asset-backed securities short-term paper market shuts down in 2007 Statistics Canada • Statistique Canada

  13. Quarterly flows: Change in investor demand Statistics Canada • Statistique Canada

  14. Mortgage asset flows: securitized outside of the NHA MBS program Statistics Canada • Statistique Canada

  15. Quarterly asset flows: securitized consumer credit and commercial loans and leases since mid 2007 Statistics Canada • Statistique Canada

  16. Strong growth in securitization in Canada, to the point where financial activity significant … securitization likely to continue and evolve Continuing data challenges: evolving survey design to capture overall activity and avoid any possibility of double counting As securitization activity is increasingly consolidated on originators’ balance sheets (IFRS), would SNA recommend a securitization sector or sub-sector? Coordination of groups looking into on securitization issues – credit market side and securities side Question: how has securitization activity evolved in other OECD countries, before/result of the financial crisis? Future Statistics Canada • Statistique Canada

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