On May 18, 2012, the SEC staff issued a no-action letter which will allow the Royal Bank of Canada (RBC) to register the offer and sale of covered bonds in the US, subject to the terms and conditions set out in its letter to the SEC. It is the first time that the SEC has permitted this type of registration and it will enable RBC to undertake the first public offering of covered bonds in the US.

Covered bonds have previously been offered in the US in Rule 144A offerings, which are subject to certain restrictions that do not apply in registered offerings. This no-action letter may facilitate growth in the US covered bonds market.

For more information on covered bonds, see Practice Note, Covered Bonds: Overview.