Covered Bonds


Covered Bonds

Covered bonds, a hybrid between asset-backed securities/mortgage backed securities and normal secured corporate bonds, are an instrument of refinancing, primarily used by mortgage lenders. Unlike secured corporate bonds which provide recourse against the issuer, covered bonds provide a dual recourse – that is, first recourse against the issuer, and bankruptcy-protected recourse against the assets of the issuer (Cover Pool) too. Covered bonds are expected to provide a rating upliftment, over and above the rating of the issuer.

Covered bonds have existed in Europe for over 200 years. Until recent years, covered bonds have essentially been a Continental European instrument, known by variety of names such as pfandbriefe in Germany, realkreditobligationer in Denmark, obligations fonciers in France, pantbrev in Spain, etc. However, the sub-prime crisis and the associated aversion for mortgage backed securities gave a new wave of popularity to covered bonds, spreading it to many new destinations such as USA, Australia, New Zealand, Canada, Korea, and Malaysia and so on. The Asian market for covered bonds seems to be looking up with Singapore banks taking covered bonds with aplomb.

Vinod Kothari Consultants in the field of Covered Bonds

Vinod Kothari Consultants is a premiere training agency which offers at least 20 training course on Credit Risk, securitization and credit derivatives all over the world, of which faculty for most of them is Mr. Vinod Kothari himself. The locations VK has offered seminars/ workshops on advanced topics in finance include New York, Washington DC, London, Milan, Frankfurt, Luxembourg, Sydney, Singapore, Hong Kong, Kuala Lumpur, Johannesburg, Mumbai, Delhi, Kolkata, Shanghai, Shenzhen, Colombo, Colombia (South America), Dubai, Kuwait, Dhaka, Zambia, Jordan, Egypt, Indonesia, Nigeria, etc.

We will be glad to structure training on covered bonds on public/private basis.

Our Past Experience

Apart from trainings, Vinod Kothari Consultants has also worked with a number of reputed organizations in the world. Some of the prestigious projects that we have handled so far has been listed below:

  • We are currently retained by National Housing Bank for promoting Covered Bonds in India.
  • We were a part of a Working Committee formed by National Housing Bank to suggest measures for exploring capital market instruments in India and alternative instruments like Covered Bonds. We were instrumental in bringing the draft of the Covered Bonds regulation in India as well.
  • We are hopeful of launching the first covered bond issue in India soon.

Articles On Covered Bonds