Covered bonds face an identity crisis

WHEN IS A covered bond not a covered bond? When it’s a structured covered bond? When it’s a structurally enhanced covered bond? When it’s issued by an opportunistic borrower and bought by an opportunistic investor? When it trades tighter than a government bond?

Covered bonds, it seems, are going through an identity crisis. So are some bankers. In September, Bank of Ireland raised e2 billion through the first mortgage-backed deal under Ireland’s asset covered securities (ACS) legislation.