Turn the clock back just a few years and the image that sprang to mind at the words "covered bond" was of a German market proud of its traditions and robust structure. But while the Pfandbrief continues to play a central role in the market, its supremacy has been challenged by a number of newcomers, most notably out of the Spanish Cedulas stable. And the covered bond family looks set to grow further over the coming months. While regulators in Spain are currently refining legislation regarding the asset class, that is just one of a number of...Read more
To purchase printed copies or a PDF of this report, please email leonie.welss@lseg.com and shahid.hamid@lseg.com
Expectations for covered bonds this year for the most part centred on just two things. Buoyed by previous experience, participants braced themselves for record volumes, while a proliferation of covered bonds in the US was eagerly awaited. However, as the end of the second quarter draws closer, it looks as if expectations will have to be reassessed. Rachelle Horn reports.
The Spanish covered bond market has enjoyed something of a renaissance in 2007, as supportive supply/demand dynamics have underpinned spreads in a sector that has outperformed many of its peers. The market also has another reason for optimism, as proposed improvements to the Cedulas framework are awaiting the green light from the Spanish parliament, a scenario that should lend further support to spreads in the future. Andrew Perrin reports.
Liquidity, attractive spreads on a risk-adjusted basis and diversification make covered bonds one of the hot favourites among investors. While a US dollar-denominated issue from a US borrower would certainly add more depth and breadth to the market, with more countries poised to enter the arena, investors do not have to worry too much about concentration risk in their portfolios. Malini Menon reports.
With the Republic of Italy being one of the few remaining large eurozone countries without a full-scale covered market, the arrival of a new covered bond law has been eagerly awaited. It has also been a very long time in the making. But could the wait now be over for Italy's long-suffering banking industry? Rachelle Horn investigates.
Basel II has finally arrived: yet in spite of the long lead time prior to its implementation, participants in the covered bond market are still grappling with its implications. William Thornhill reports.
The expansion of the non-euro covered bond market is a developing theme, with the US dollar sector the main beneficiary of the trend so far. While recent US dollar deals have suggested this may pose a real challenge to the dominance of the euro, its progress has been beset by a number of initial obstacles. An increase in issuance volume seems to indicate that these hurdles are slowly being overcome, however. Michael Winfield reports.
Structured covered bonds have seen exponential growth since their inception in 2003. With a number of issuers now choosing to eschew even the most revered covered bond laws, the debate concerning structured covered bonds has never been hotter. Rachelle Horn reports.
The arrival of Norwegian and Danish covered bond laws will round off the Scandinavian market. While their advent has been a long time coming, an efficient Sweden has already exceeded expectations in its short existence on the international covered bond stage. Rachelle Horn reports.
Several European countries are currently busy drafting new covered bonds laws or revising their existing legal regimes. The following table provided by DZ Bank gives a summary overview of the current state of play in the legislative processes that are under way and the date when the new/revised laws are expected to come into force.
The announcement that HSBC intended to use a single mortgage portfolio for the issuance of either covered bonds or RMBS was real evidence of a convergence many had thought had been happening for some time. But while the structure offers diverse funding opportunities, these are not the paramount concern to such a well-funded bank, as Philip Wright reports.
After a turbulent couple of years, a beleaguered AHBR has undergone major restructuring. Soon to be renamed COREALCREDIT BANK, the re-branded entity now sees its future position within the German commercial real estate market. Rachelle Horn reports.
Having made its debut in the jumbo covered bond market at the beginning of 2006, Aareal Bank has become a familiar name on the covered block having followed this up with another mortgage-backed jumbo this year. Once again, investors proved receptive to the attraction of a very broad international cover pool that stands out for its diversity against those of many of its peers. Andrew Perrin reports.