Covered bonds are debt securities issued by a bank or mortgage institution and collateralised against a pool of assets that, in case of failure of the issuer, can cover claims at any point of time.
Setting up a Covered bond programme or utilising “tap issuance” helps issuers achieve faster execution, especially relevant given longer lead times for covered bond transactions. Admitting a covered bond programme on International Securities Market (ISM) is a smooth process as it is treated as a standard Eurobond transaction for document review and admission purposes. Covered bonds can easily be admitted to ISM as either a secured debt issue or as an asset-backed security, depending on how the transaction is structured; either way, both structures are accommodated conveniently on the Main Market or the ISM
With no requirement to appoint a listing agent and no annual fees associated with a London listing, legal and operational costs for setting up the programme on London’s markets are significantly reduced.