"The Name is Bond. Covered Bond."

The online publication Housing Wire also prints a glossy magazine called HW, which has devoted a special section to prospects for U.S. covered bonds in its February 2010 issue.

Introducing what it calls a "relatively unexplored product" to American mortgage lending professionals, the magazine's cover proclaims: "The Name is Bond. Covered Bond."

The special section poses the question:  "Can covered bond break out and become a viable, third option in origination funding?"  It contains several stories and sidebars:

• Interview with Congressman Scott Garrett (R-NJ).  Rep. Garrett is the prime mover in attempts to pass legislation supporting covered bonds in the U.S. — most recently in the form of a proposed amendment to a financial reform bill.  In this interview,  Garrett explains why covered bond legislation is important, diplomatically conveing some frustration that more has not yet been accomplished.  He is quoted as saying:

"Had we passed this bill a year ago, let's say, so the mechanisms could just about now — considering the way government operates — be all in place so covered bonds could be rolling off the ground, then this market would begin to be opening up.  Whereas with securitization, here we are a year later after the meltdown, we're still pretty well seized up."

• House Financial Services Committee hearing.  Summaries of testimony from expert witnesses at a Congressional hearing on covered bonds in December 2009 include a quote from Wesley Phoa, an SVP at the Capital Group Companies, to the effect that covered bonds could be a good private sector alternative to government-supported mortgage funding because "safety comes from good collateral, not government support."

• Pre-hearing press conference.  A reprise of a prehearing press conference by Congressman Garrett and two covered bond experts included quotes you can also read in Covered Bond Investor™'s complete transcript.

• "Step by step example" of covered bond rating process.  A sidebar in the HW's special section contains a highly simplified overview of Fitch Rating's process for rating a covered bond issue.  Fitch is one of several agencies that rates covered bonds.  [Ed. Note: Much more detailed information about covered bond rating methodology can be found in chapters provided by Fitch, Moody's Investors Service and Standard & Poor's for the 2009 ECBC Covered Bond Fact Book.]

• Commentary from Tim Skeet.  In a short "Trader Talk" piece, Tim Skeet (Head of Covered Bonds at Bank of America Merrill Lynch) makes the point that future U.S. covered bond issuers "will need to establish themselves with U.S. investors first before looking to return to tap European demand in covered bond format in order to achieve the more competitive spreads."  [Ed. Note: You can read an in-depth Covered Bond Investor™ interview with Tim Skeet here.]

Meanwhile, in another sign of growing coverage of covered bonds in the U.S. financial media (both mainstream and blogs), a short posting on The Basis Point (Feb. 22) deals with the topic: "What Are Covered Bonds, and Can They Help Housing?"