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

Gaping-hole-in-MMF-market montage

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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