To view the digital version of this report, please <a href="http://edition.pagesuite-professional.co.uk/Launch.aspx?EID=5ba65744-0322-4018-a8b4-abb4b31b204c" onclick="window.open(this.href);return false;" onkeypress="window.open(this.href);return false;">click here</a>. To purchase printed copies or a PDF of this report, please email gloria.balbastro@thomsonreuters.comForging a new identity The stature of covered bonds as a funding tool continues to grow

To view the digital version of this report, please click here. Belgium is now on a clear path to seeing the launch of the country’s first covered bonds in January next year as bankers expect the final details of long-awaited legislative framework will be agreed upon in the coming months. The National Bank of Belgium, in consultation with the banking sector, has been working on a draft legislative framework. Belgium is one the few European countries that has no dedicated legal framework in place,

To view the digital version of this report, please click here. Canada’s new law on covered bonds is included in the 400-page Budget Implementation Bill (Bill C-38) that is working its way through Canada’s parliament amid considerable controversy. Nevertheless, the covered bond legislation in the bill is expected to pass into law before the end of the third quarter, and its key provision will prevent issuers in future from including insured loans – whether the cover comes from the public Canada M

To view the digital version of this report, please click here. Spanish banks are facing an uncertain future in the covered bond market. Grappling with a capital shortfall anywhere from €62bn to €100bn, the country’s banks are now shut out of the covered bond market, their only source of public funding, for the foreseeable future. In spite of the pledging of eurozone bailout funds to address their capital shortfalls, Spanish banks are facing an uncertain future in the covered bond market – their

To view the digital version of this report, please click here. Now more than halfway through the 12 months it set aside for the programme, the ECB has only spent a third of its €40bn kitty and there appears little it can do to claw open Spain and other markets locked shut by the crisis. ECB analysis shows that in contrast to the first programme, which slashed covered bond yields before a single euro was even spent, the launch of the second one had little immediate impact. In fact, swap spreads c

To view the digital version of this report, please click here. With investors searching for sanctuary from the ravages of a turbulent global economy, few markets offer better shelter than covered bonds. For those looking for an extra layer of protection, Nordic issuers offer the ultimate kite mark: “In this highly cautious market, many investors seek covered bonds issued by strong banks from countries with healthy balance sheets,” said Ted Lord, head of European covered bonds at Barclays. “In ad

To view the digital version of this report, please click here. French banks have been going through a funding roller-coaster ride in 2012 as volatile sovereign markets have dragged covered bond spreads to historic wides only to tighten again as the ECB arrived with unlimited cash to ease the pressure on European financial institutions.  For the second half of 2012, syndicate officials say the country’s banks are in a comfortable position of almost being fully funded and covered bond spreads are

To view the digital version of this report, please click here. Some £6.6bn of sterling-denominated covered bonds were issued last year, representing 25% of the total (with the majority of issuance still in euros) according to Barclays. The positive trend continued this year and year to date supply stands at £5.25bn, representing 14% of sales. That compares with 3% in 2010. In seeking to explain the surge in sterling covered bond issuance analysts cite some circumstances that have helped the mark

To view the digital version of this report, please click here. It is now easy to forget that until October last year, Australia did not have a covered bond market. Progress had been hampered for years by regulatory concerns, the main one being the impact it would have on the existing senior unsecured market: any claims made on banks by investors in the senior unsecured market are subordinated to covered bond claims in the event of a default. The Australian Prudential Regulatory Authority also wo

To view the digital version of this report, please click here. With the runaway successes of the covered bond structure in Australia since November – US$11.2bn issuance year to date according to figures from UBS – little surprise then that the rest of Asia is looking to follow suit. But investors who had hoped for a wave of Asian issuance have been disappointed. The natural place to start is South Korea. “Korea is the reference point for covered bonds in Asia. Everyone else is thinking about it,

To view the digital version of this report, please click here. Since the end of May a string of German issuers has come to the market with Pfandbriefe that have flown off the shelves and priced tighter and tighter. The pinnacle – so far – was reached with Landesbank Baden-Wuerttemberg’s 1.375% €500m five-year which went at 7bp over mid-swaps, the tightest print of the year. Since then it has tightened even more in the secondary market by 3bp–4bp. No wonder then that bankers have called the curre

To view the digital version of this report, please click here. Issuance of covered bonds from the eurozone is in decline. This year issuance from the eurozone is expected to hit a paltry €120bn according to figures from Barclays. Compare that with 2010, which saw a hefty €253.2bn gross issuance. What happened? Tim Skeet, managing director in debt capital markets EMEA at RBS, elegantly pointed out that Europe has become a four-tiered market depending on strength of investor appetite, funding need

To view the digital version of this report, please click here. Canadians have accounted for 52% of all US dollar covered bond issuance since 2010, providing the market a solid foundation at a time when the US has failed to give its own banks the right to access the cost-effective market. Of the roughly US$26bn raised in the first half of this year, about US$11bn came from Canadians. Top banks from the eurozone issued over US$6bn, with Barclays returning for the first time in a few years; Austral