Bank of Ireland's mortgage banking unit is readying the country’s first issuance of covered bonds backed by a pool of residential mortgages. The €2 billion issue, which will be triple-A rated, is set to be priced within the next month. Barclays Capital, Deutsche Bank, Citigroup and Davy Stockbrokers are joint leads on the deal.The Irish covered bonds benefit from the strength of both the Irish covered bond legislation and certain limited additional structural enhancements, according to Moody’s Investors Service, which rated the deal.
Similar to all covered bonds that have limited or no structuring, the credit strength of these bonds will be affected by the future collateral that is placed in the asset cover pool. At press time, certain details of the bond issue had not been determined, but the issue is likely to be a euro-denominated fixed-rate bullet bond.
Although Irish covered bond legislation has been in place for some time, to date no bonds backed by a pool of mortgages have been brought to market. However, bonds backed by public sector loans have been done in the past by DZ Bank and WestLB.
More on Structured Products
Move follows series of structured products hires at Canadian banks
The pros and cons of obtaining diversification through multiple counterparties
Potential for early kick-out on Russell 2000 and iShares Emerging Markets ETF
Six-year product exploits low correlation between sectors
Sign up for Risk.net email alerts
Nominated for two technology awards
Nominated for post trade technology award
Sponsored webinar: Collateral and counterparty tracking
Isda directors warn on fragmentation, access and liquidity - but expect problems to pass
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.