Basics

The European Covered Bond Council's (ECBC's) Fact Book, released in a new edition yearly, is the world's single greatest annual source of information, insight, and statistics on covered bonds.  It is also one of the world's great values—available free as a PDF download.

Although the focus is naturally on Europe, the book's coverage is broader, including strong technical articles on covered bonds in the U.S. and Canada.

The following was adapted from an announcement by DBRS:

In a commentary published Sept. 21, Canadian rating agency DBRS has provided a comprehensive review of the Canadian covered bond and residential mortgage markets.

Detailing the history and current status of the covered bond programs established by Canada's five largest banks, the commentary provides in-depth analysis of the residential mortgage market and the liquidity of residential mortgage loans in Canada.

If German Pfandbriefe (legislatively established covered bonds) are the "gold standard" for covered bonds, the Association of German Pfandbrief Banks (vdp) may be considered the bedrock of the Pfandbrief.  The vdp's 35 member institutions include many of Germany's best-known Pfandbrief issuers.

"There are currently around EUR 870 billion of privately placed covered bonds, roughly the same volume as for benchmark covered bonds [i.e., issuances of at least €1 billion each, which are typically sold at public auction].  However, private placements are sometimes overlooked in analysis and statistical reports on the covered bond market, despite being the dominant type of issuance in several countries [including Germany]."

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.

"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."

The European Covered Bond Council's (ECBC's) Fact Book, released in a new edition yearly, is the world's single greatest annual source of information, insight, and statistics on covered bonds.  It is also one of the world's great values—available free as a PDF download.

Although the focus is naturally on Europe, the book's coverage is broader, including strong technical articles on covered bonds in the U.S. and Canada.

Yes, we know—there are already dozens of charts floating around that compare/contrast the key features of covered bonds with ABS/MBS.  The most frequently cited differences for covered bonds relate to dynamic cover pools, dual recourse, reduced prepayment risks, and on-balance sheet obligations.