Covered rally thrives on cash not conviction

06 Mar 2012

The secondary covered bond rally rolls on, grinding spreads tighter and pushing yields to their limit. But foresight and fundamentals have played no part in the lust for peripheral paper. As lucrative as the carry trade has been for banks, when things turn sour investors could find themselves trapped.

Since mid-January the secondary covered bond market has witnessed a rally of epic proportions. Curves beaten flat by sovereign turmoil late last year are now at a precipitous slant. Bank treasuries have ploughed cheap three year money courtesy of the European Central Bank into short dated peripheral covered ...

Please take a trial or subscribe to access this content.

Contact our subscriptions team to discuss your access: subs@globalcapital.com

Or sign up for a trial to gain full access to the entire site for a limited period.

Free Trial

Corporate access

To discuss GlobalCapital access for your entire department or company please contact our subscriptions sales team at: subs@globalcapital.com or find out more online here.