Lower covered bond issuance increased OC levels, says Fitch

By David Freitas
07 Aug 2020

Overcollateralisation (OC) levels have increased on covered bond pools since last year for European issuers, Fitch Ratings said this week. But while issuers in some countries, like the UK, showed a rise above the average, borrowers that have participated in central bank funding, like those in Germany, have managed to keep OC levels down.

A new leg of the European Central Bank’s Targeted Longer Term Refinancing Operations (TLTRO III), which was introduced to provide liquidity during the coronavirus crisis, has proved so attractively priced that banks have switched to it in favour of issuing public covered bonds

According to Fitch, overall nominal ...

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