Covered bonds: Picking up tacks in front of the steamroller
If covered bonds have been appealing to investors unable to find yield in the sovereign and supranational sectors, bankers report that they have also been attracting investors from elsewhere in the credit world. "A feature of the order books for some of the very large recent deals is that we have seen investors moving out of corporate issues that have tightened significantly and into covered bonds," says one banker.
Schroders is one investment manager providing an example of that process. Lucette Yvernault, portfolio manager at Schroders in London, says that while the firm has no dedicated covered bond mandates, the asset class has...
