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Covered bonds have been a mainstay of European asset-based funding for centuries, but they are still little-known in the U.S.  Here are the ten most important things to understand:

"From 1 January to 29 January 2010, the Eurosystem purchased eligible covered bonds with a total nominal value of €5,559 million under its covered bond purchase programme (CBPP).  Of this total, €2,187 million was accounted for by purchases in the primary market and the remaining €3,372 million by purchases in the secondary market.  The total nominal value of all covered bonds purchased by the Eurosystem since the programme was fi rst started stood at €33,823 million on 29 January 2010."

"With political momentum building for a fully-fledged legislative framework to be adopted in the U.S., we may finally be poised to see the world's largest capital market embrace the covered bond. "

So writes Tim Skeet, Head of Covered Bonds at Bank of America Merrill Lynch (London), in this one-page article from the January edition of Mortgage Info — a publication of the European Mortgage Federation (EMF). 

This graphic, prepared by Covered Bond Investor™ cofounder Mercy Jiménez, is a timeline showing key events in the (short) history of covered bonds in the U.S.  It includes early issuance by Washington Mutual and Bank of America, which halted as the global economic crisis began to mount.

To download a PDF, click on "Key Events Graphic" under "Attachment," below.