SME covereds: good intentions, bad consequences

When is a covered bond not a covered bond? Commerzbank’s controversial SME structured deal generated much emotion at the IMN covered bond conference in London this week. In a show of hands, almost all delegates thought the issuer should not have been able to market it as a covered bond. The Cover looks into the reasons for their disapproval and considers the arguments for the defence. Whoever is right, Commerz has given the market a new headache.