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FIGCovered Bonds

Cédulas plot through the sovereign crisis

Even if a path through the crisis is found, it seems unlikely that the cédulas market will ever be capable of making a return to the heady levels of five years ago. Slow economic growth, a banking sector that is quickly deleveraging and consolidating, and the fact that some major issuers are close to hitting the minimum legal threshold of 25% overcollateralisation - means that, even when conditions stabilise, the eventual size of the market will be a fraction of what it used to be. Bill Thornhill reports.

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