Publications

This useful fourteen-page report from the Congressional Research Service was written by Edward V. Murphy, a specialist in financial economics.  Here is the table of contents:

Definitions

Policy Issues

"Skin in the Game" and Underwriting

Transparency and Investor Confidence

Capital Requirements and Lending Volume

Maturity Mismatch

The Association of Danish Mortgage Banks represents financial institutions subject to Danish legislation that "use sources of funding such as covered bonds (SDOs), covered mortgage bonds (SDROs) and mortgage bonds (ROs) to grant loans against mortgages on real property."

Canadian covered bonds are the topic of a reference article by John Mackle in Westlaw Business titled "Covered Bonds: Canadians Do Debt in Europe" (May 26). The article's premise is that with recent Canadian covered bond issues raising billions, "the legal nuances of the covered bond will soon be a topic for discussion in many boardrooms."

"From 1 April to 30 April 2010, the Eurosystem purchased eligible covered bonds with a total nominal value of €5,218 million under its covered bond purchase programme (CBPP). Of this total, €1,535 million was accounted for by purchases in the primary market and the remaining €3,683 million by purchases in the secondary market. The total nominal value of all covered bonds purchased by the Eurosystem since the programme was first started stood at €50,116 million on 30 April 2010."

When it comes to developing covered bonds as a funding tool, Canada is way ahead of the U.S., with a couple of multibillion dollar issuances aimed at American institutional investors already this year.  This one-pager from Canadian rating agency DBRS provides statistics to show how much Canada's Big Five banks have issued in total — and how much further their covered bond programs could go.

If you are looking for a concise, up-to-date introduction to covered bonds that is written in plain language and yet speaks with authority and touches all the bases, Moody's "A Short Guide to Covered Bonds" fills the bill admirably.

Chart showing Moody's-rated European covered bond programs, by country, at EOY 2009 (Source: Moody's Investors Service) CLICK IMAGE TO ENLARGEThe headings in this five-page guide provide both a sense of the subject areas addressed and the informal, lucid style:

Analysts at Unicredit, a major European financial institution, have pronounced the U.S. Covered Bond Act of 2010 (USCBA) — introduced in Congress March 18 by Rep. Scott Garrett (R-NJ) — to be "a very promising step in the direction of a new U.S. covered bond market."

"[T]o all you Government bonds out there — we wanna be like you, we wanna walk like you, talk like you, too."

That comment was written by Deutche Bank's Mauricio Noé, speaking on behalf of covered bonds in language echoing lyrics from Disney's Jungle Book movie.  It is part of a one-page opinion piece that Noé wrote for the April issue of Mortgage Info, which is published by the European Mortgage Federation.

Michael Durrer, lead partner on Sidley Austin LLP's covered bond team, is a member of the influential U.S. Covered Bond Council.  The law firm justifiably describes itself as a "pioneer" in the covered bond field, having "acted for the issuers in establishing the first two covered bond programs in the U.S.," as well as "representing the arrangers on the first U.K. structured covered bond program."

Morrison & Foerster (MoFo) can write with authority on the topic of covered bonds because its attorneys include Jerry Marlatt, who is credited with helping to engineer the first issuance of covered bonds in U.S. history (by Washington Mutual).  Reflecting his level of interest, Marlatt was among the few observers who personally attended a December 2009 Congressional hearing on covered bonds held by the House Financial Services Committee.