IMAGINE YOU ARE at a party where the music is discordant, the food and drink are running low and the host is growing weary of guests who are taking advantage of his hospitality. That was the covered bond market five years ago. Now the mood music has altered, food and drink are flowing and the host is welcoming a stream of newcomers.
Newcomers have given the sector an increasingly international flavour over the past few years. If expectations are met, this trend will continue and investors will this year play host to an impressive range of new covered bond issuers from various countries. For a variety of reasons, including new regulations and the need for funding diversification, there is every expectation that the biggest, most liquid and highest-rated European bond segment is about to get bigger.
“Non-German issuance is increasingly prominent,” says Richard Kemmish, covered bond product manager at Dresdner...
