Cédulas left with dregs in new Spanish covered law

By Bill Thornhill
23 Oct 2014

Spain’s new covered bond law, if passed, will mean a vast improvement in the quality of the country’s covered bond collateral – but could come at the expense of holders of the old bonds, who will find their deals backed by a dwindling pool of poor quality loans, unless they exchange into new deals.

The Spanish Treasury is proposing to change the country’s covered bond legal framework, bringing it into line with other European regimes, and on Wednesday, it asked for feedback from stakeholders. The move should create a new regime in which the bonds are backed by a tightly defined pool ...

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