Delineating the senior claim in covered bonds
Covered bonds are flavour of the month, partly because investors have dual recourse to both the issuer and the collateral. And the fact there has not been a default since time immemorial gives the impression they are almost infallible — but they are not. That’s why it is important investors take time to look under the bonnet and work out what might happen just in case the unthinkable happens.
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