Opaque taps weaken secondary performance

Investors need to be more aware of how a lack of transparency over issuer taps can adversely affect the performance of covered bonds in the secondary market, Barclays Capital research has said. Market traders find their job more difficult and tend to price bonds wider, which has a knock on effect for bond holders and issuers. The research advises investors to buy-and-hold as a result and to try to participate directly in the taps.