Bright Outlook For Covered Bonds

This year has proven to be an interesting one for the covered bond market, and we anticipate that 2013 will bring many important new developments. During 2012, the covered bond market continued to provide attractive financing opportunities for European banks. However, many of the most noteworthy developments in 2012 occurred outside the Eurozone. Various new jurisdictions approved covered bond legislation, including Canada, Mexico, Morocco, New Zealand, Singapore, and South Korea. We saw various covered bond issuances from Australia and also from Latin America. Quite a number of foreign banks accessed the U.S. dollar market with issuances into the United States conducted on an exempt (Rule 144A) basis and sold to institutional investors. This year also saw the first U.S. SEC-registered covered bond offering. These dollar-denominated issuances proved that there is a significant investor base for covered bonds in the United States. A number of key regulatory developments,