TD Asset Management Inc. (TDAM) and BMO Global Asset Management (BMOGAM) have won mandates to manages assets for Bank of Canada (BoC) bond programs.
TDAM was named asset manager for BoC’s $10 billion corporate bond-buying program, which will launch next month to bolster liquidity in corporate bond markets.
The central bank picked TDAM to serve as the asset manager for its corporate bond purchase program, which will buy senior secured and unsecured bonds issued by Canadian companies (except financial institutions) in the secondary market.
“This program will support the liquidity and proper functioning of the corporate debt market,” the BoC said when it announced the program on April 15.
Bonds that are eligible to be bought under the program will carry a remaining maturity of up to five years and a minimum credit rating of BBB.
“A liquid and efficient market for Canadian-dollar corporate bonds allows companies currently challenged by the impact of the Covid-19 pandemic to continue to obtain necessary longer-dated financing to support their operations, ultimately aiding the Canadian economy,” the BoC said.
The program, which is expected to launch in early May, will be capped at $10 billion and is to remain operational for 12 months.
However, these parameters “may be expanded if conditions warrant,” the bank said.
“TD Asset Management was selected following a competitive procurement process. They were selected based on their capacity to quickly and effectively establish and manage this program, and their robust conflict of interest policies and processes,” the bank said.
Last week, the central bank selected BMOGAM as the asset manager for its $50-billion program to support the provincial bond market, which is also being launched in response to the pandemic.
Earlier, the bank hired BlackRock Financial Markets Advisory to provide advisory services and CIBC Mellon to serve as custodian of both these programs.