The pool of loans originated by alternative mortgage lender MCAP would be just below prime-credit quality, the firm’s CEO Derek Norton said. An unnamed source added that the initial wave would be less than $100 million worth.
Canada’s non-bank sector was affected by the collapse of the commercial paper market backed by residential mortgages at the start of the financial crisis.
National Bank has not commented on the report.
More market update:
A Bloomberg report says that National Bank of Canada is talking to investors about a bond backed by nonprime or alt-A residential mortgages.