"Uncovering a Covered Bond Market in Australia"

"The introduction of a covered bond market into Australia during the current market conditions would help to diversify funding sources leading to a greater degree of financial stability.  It is not surprising, therefore, that covered bonds are currently being considered by Treasury as a potential source of funding for Authorised Deposit-taking Institutions."

Those are among the opening remarks in a twelve-page article on covered bonds from lawyers at Henry Davis York (HDY), a Sydney-based law firm that has announced formation of a covered bonds team — reportedly the first in Australia.  The purposed of the article is "to put the current debate on covered bonds in Australia in perspective by providing an analysis on what covered bonds are and considering the important role they could play in Australia to contribute to the efficient allocation of capital, economic development and prosperity."

Topics covered in the HDY article include the definition, key features and possible structures of covered bonds; advantages of covered bonds in comparison to securitization; and the current situation and push for covered bonds in Australia.  Separately, HDY has released two "fact sheets" on covered bonds (also available for download below).

To download a PDF of HDY's article, "Uncovering Covered Bonds in Australia," click on "HDY Uncovering" under "Attachments," below.  To download a PDF of HDY's fact sheet on the "top ten most asked questions," click on "HDY Top Ten."  To download a PDF of HYD's fact sheet on "key characteristics of covered bonds," click on "HDY Key."