CMHC expands bond program to add 10-year maturity

TORONTO, July 31 (Reuters) - Canada Mortgage and Housing Corporation said on Thursday it is expanding the Canada Mortgage Bond Program to include a CMB with a 10-year maturity in order to attract a broader pool of investors.

Bonds issued by Canada Housing Trust under the program are rated AAA by three agencies and guaranteed by CMHC, a federal government agency.

The 10-year addition is on top of the 12.5 billion of debt issued by the CMHC in June, which included a new 5-year benchmark bond for C$9.0 billion, a reopening of a shorter-dated 3-year issue for C$2.0 billion and a new 5-year floating rate note for C$1.5 billion.

That transaction, a record amount for the program, provided funding for 25 different mortgage originators, which sold an estimated 64,000, 100 percent insured residential mortgages.

In total, there is roughly C$136 billion in various CMB issues outstanding, most of which are fixed-rate issues.

CMHC introduced the CMB Program in June 2001 to improve access to lower cost mortgages and to enhancing liquidity in the mortgage market, the agency said. CMB are issued by the Canada Housing Trust and are fully guaranteed as to timely payment of principal and interest by CMHC. ($1=$1.02 Canadian) (Reporting by John McCrank; Editing by Frank McGurty)