NIBC tries to bridge the great ABS-covered bond divide with pass-through
The worlds of securitisation and covered bonds are colliding as issuers and investors wrestle with rating volatility. With Commerzbank preparing its ground-breaking SME structured covered bond, which relies on a pass-through structure traditionally used in securitisations, NIBC is looking at a new covered bond programme that would feature a similar structure, writes Bill Thornhill.
However, unlike Commerzbanks deal, NIBCs would be backed by traditional mortgage assets and the programme would fall within the scope of the existing Dutch legal framework.
Pass-through means cover pool cashflows are directly passed to investors. Commerzbanks bond will pay coupons and principal to investors directly from the
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