With no legal framework for covered bonds in the US, institutions in Europe should be preparing to take advantage of the enthusiastic investor base that already exists there with dollar-denominated bonds.
“There’s only been one European deal so far this year, but the US investor community is very interested in covered bonds,” said Tim Skeet, head of covered bonds at Bank of America Merrill Lynch and a board member of the International Capital Markets Association.
The opportunity to diversify their investor base will be the biggest draw for banks, and should make the additional work worthwhile.
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