Canadian MMFs face yield squeeze on CDOR’s demise
High-yielding BA notes will disappear from the market in June with no clear replacement at hand
Canada’s Bankers Acceptance (BA) market will disappear along with its legacy interbank lending rate on June 28, leaving a C$90 billion ($67 billion) hole in the portfolios of local money market funds (MMFs) that have around 20% of their assets invested in the notes.
“It’s a very significant problem,” says Walter Posiewko, a former money market manager for RBC Global Asset Management, who has worked on the transition from the Canadian dollar offered rate, or CDOR, to its successor, the Canadian
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