Covered Bonds 2012

Request a PDF

  • Weighed down: the pleasures and perils of secured funding

    2011 was the year of the covered bond. As volumes grew, more and more countries signed up to get in on the action. Senior unsecured ground to a halt and became prohibitively expensive, leading many issuers to look to covered bonds for relief. But banks cannot live on secured bonds alone, reports Will Caiger-Smith.

  • The LCR conundrum

    This year will see an important step taken in the European implementation of Basel III’s Liquidity Coverage Ratio. For covered bond bankers, the thorny issue of what constitutes a liquid product is top of the agenda. As Bill Thornhill writes, they argue that a quantitative approach is the wrong way to go about it.

  • The euro — from the outside looking in

    The covered bond market has roared back to life in 2012. After a torrid six months of sovereign turmoil and widespread risk-aversion, issuers are enjoying record order books and unprecedented demand. But as the debt crisis still casts a pall over the Eurozone, investors continue to prize issuance from regions untroubled by the threat of sovereign default, bank insolvency and systemic risk. Australia and the Nordic jurisdictions are two such regions, boasting strong economies and sound financial systems that particularly appeal to buyers in search of safe-havens. With domestic markets to rely on, euro benchmarks from both areas have additional rarity value.

  • Peeling back the layers

    Investors are fed up with focusing too much on the strength of issuing banks to value covered bonds. Now they are demanding more details about the underlying assets. But baring all is not necessarily the solution for borrowers either, reports Katie Llanos-Small.

  • LTRO brings relief but fears build over damaging dependency

    The ECB’s Long term Refinancing Operations have sent cash-rich investors rushing back to the primary and secondary markets. But while some jurisdictions have re-opened, others remain closed. Steve Gilmore looks at how a €1tr liquidity injection has affected primary issuance, and whether a secondary rally of epic proportions is headed for disaster.

  • Flurry of private SME secured deals point to public debut

    Banks will be grateful for another funding route once senior unsecured costs start to rise again, reports Bill Thornhill. Dual recourse covered bonds backed by loans to small and medium sized enterprises offer a neat solution. Following a series of privately placed deals, the first public issues in Germany or the UK look imminent.

  • Covered investors gather for a perfect storm

    After months of being forced to pay chunky new issue premiums in fleeting funding windows, issuers suddenly find themselves with a captive market. Building record order books and attracting hundreds of investors has become commonplace, as buyers old and new flock to covered bonds. Steve Gilmore looks at how the market reached its impressive depth, and whether it’s too good to last.

  • Covered bond market running to stand still after ECB game-changer

    The European Central Bank’s long term refinancing operations injected around €1tr of liquidity into the European banking system and, in just a few months, sentiment in the covered bond market has spectacularly improved. The question now is, how long will it last?

  • Australia’s big four make a splash

    Subdued issuance within the Eurozone, even after central bank support, has quickly turned Australian covered bonds into a pillar of the market, and not just a convenient safe haven trade. Joe McDevitt reports.

Publisher: Oliver Hawkins

Telephone: +44(0)20 7779 7304

Commercial director of events: Daniel Elton

Telephone: +44 (0)20 7779 7305


Publisher, special projects: Ashley Hofmann

Telephone: +44 (0)20 7779 8740