The European Central Bank (ECB) is making it more difficult for banks to enter into covered bond repurchase agreement (repo) trades with it. That, along with a recent widening in the spread between senior unsecured bonds pay over banks' secured debt, such as covered bonds, could boost the supply of the latter to public markets.
From February 1, 2020 the covered bonds that issuers retain in order to access central bank cash, rather than sell to investors, must have their own credit rating. Issuers will no longer be able to rely on their overall bank credit rating to be eligible for the liquidity,
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