Primed to recover

As investor appetite for securitisation deals remains weak, Dutch mortgage lenders are looking for alternative funding tools. With the government expected to establish a regulatory framework for covered bonds as early as July, issuance could soar over the next few years. Han-Nee Tay reports

Dire conditions in the securitisation market in the Netherlands have highlighted the need for a covered bond law. Despite the relatively robust securitisation market, Dutch mortgage lenders have found it hard to raise funds as liquidity began drying up from the middle of 2007. As investors flee towards safe-haven products, lenders are keener than ever to set up covered bond programmes to fund their mortgage business.

As yet, covered bonds in the conventional sense of the term do not exist in the