Covered Bonds Set Record for Six-Month Period - Update

"Covered bonds have enjoyed a record six-month run" with issuance of nearly $210 billion in 2010, "outstripping the previous $204 [billion] record in the first half of 2007, according to data from Dealogic."

So wrote Jennifer Hughes for the Financial Times in a story titled "Covered Bonds Prove Hot Ticket" (June 25).  The story noted that issuance is expected to slow in the second half, but more banks are expected to launch debut issues.  As part of this trend, covered bonds are expanding geographically.

Covered bonds met success in H1 2010 despite the fact that the overall volume of bonds sold in Europe dropped by 36% during the same period, according to Michael Wilson (June 27) in the Wall Street Journal (also citing Dealogic).

"Unable to sell regular bank debt, many issuers looked to covered bonds," whose sales volume rose 60%, Wilson wrote.

Despite this rise, however, issuers from Southern Europe generally have had a much tougher time this year than those from Germany, France and Scandinavia, as Wilson also observed.