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
Regulatory panel suggests backtesting internally is best practice
Growing appetite for ETFs buoys market confidence
The region's exchange-traded funds take in $56.2bn by end of October
US SEC exempts exchange-traded managed funds from disclosure protocols
Sign up for Risk.net email alerts
Sponsored webinar: IBM Risk Analytics
Nominated for two technology awards
Nominated for post trade technology award
Sponsored webinar: Collateral and counterparty tracking
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.