New countries joining the covered bond sector are almost par for the course these days but when the country concerned is the US it is highly significant. If other US borrowers follow the lead of Washington Mutual, and there are indications that at least two others will closely follow, the impact will be huge even if covered bonds are only a small proportion of their funding mix, because these are very large mortgage portfolios.
“Following a roadshow that will take place in September Washington Mutual will offer a non-European mortgage backed covered bond,” says Paul Phillips, vice-president, treasury, at Washington Mutual Bank.
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