Australian covered bonds get go-ahead

The Australian government has given permission for local banks to issue covered bonds in a move that is expected to uncover demand from the superannuation industry, according to the Treasury. The Australian Prudential Regulatory Authority overcame its long held concerns that covered bonds would subordinate depositors. It confirmed the continued role of the deposit guarantee scheme, along with an issuance cap of 5% of a bank’s assets. Legal specialists believe a non-Ucits-compliant structured covered bond format will be adopted, at least initially. Read EuroWeek on Friday to find out more.