Debt round-up: WaMu ponders a covered bond
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CAPITAL MARKETS

Debt round-up: WaMu ponders a covered bond

WaMu for covered bonds

Washington Mutual is conducting a feasibility study on the prospects of issuing a covered bond. If it goes ahead it will be the first US issuer to utilize this funding tool and will spur massive interest in the already burgeoning sector. Senior bankers say that ABN Amro and Barclays Capital are working on the study. Both banks declined to comment.

The potential impact is huge because of the large number of US issuers that could be targeted but also because it is possible that US investors will start to take a greater interest in the covered bond asset class.

If WaMu goes ahead and enjoys considerable success, development could then mirror that of three years ago when UK bank group HBOS established the UK structured covered bond market.

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