Scotiabank Boosts $100B Global Covered Bond Program with 2025 Financial Supplement

The supplement published December 9, 2025 augments Scotiabank’s CAD100 billion Global Registered Covered Bond Program, first formalised in the October 10, 2025 prospectus. The bank has secured regulatory approval from the UK’s Financial Conduct Authority, ensuring compliance with European-style covered bond regimes and making the prospectus publicly accessible through the National Storage Mechanism. [1][2]

The guarantee that backs the interest and principal payments comes from Scotiabank Covered Bond Guarantor Limited Partnership, enforcing a structural ring-fencing and legal guarantee typical for covered bond frameworks. This enhances investor confidence by providing dual-layer protection: the collateral pool plus explicit guarantee. [1]

Scotiabank’s disclosure that there is no registration under the U.S. Securities Act reinforces the program’s international orientation and confines U.S. investor participation to regulatory exemptions (Regulation S for offshore non-U.S. persons and Rule 144A for qualified institutional buyers). This limits legal risk but also restricts the buyer base. [1][2]

Strategically, the CAD100 billion covered bond program offers Scotiabank access to large-scale wholesale funding at potentially lower spreads compared to unsecured debt, given the collateralisation and strong jurisdictional pedigree. This moves contributes to funding diversification and mitigates reliance on deposit or senior unsecured funding amid rising global interest rates and regulatory pressures post-Basel III. The issuance of the supplement shortly following the annual disclosure cycle suggests an intention to keep the program documentation up-to-date with latest financials—important for investor due diligence. [1]

Open questions remain: what will be the specific terms for upcoming issuances (tenors, pricing, collateral eligibility); how this large program will impact Scotiabank’s secured funding cost versus unsecured; how the covered bond collateral pool will be structured and monitored; and how this aligns with regulatory capital requirements, especially under Canada’s institutional frameworks and for TLAC or systemic bank status. Also worthy of monitoring is investor demand in Canadian covered-bond markets versus EU/UK demand, especially in a rising rate environment.