covered bond

covered bond
International
debt securities (debt security), generally issued by banks and other regulated credit institutions and backed by a pool of assets (the cover pool) typically comprising mortgages or public sector loans originated and managed (that is, sold, replaced or substituted) by the covered bonds issuer or originator (an affiliate company of the issuer).
Payment of interest on the bonds and the repayment of principal are guaranteed or "covered" by ring-fencing the assets backing the bonds from other assets of the issuer. This ensures the assets in the cover pool are:
• Available to bondholders on a priority basis.
• Insulated from the insolvency of the issuer.
In addition, the bondholders also have an unsecured, full recourse claim under the covered bonds against the issuer's remaining, unsecured assets.
Covered bonds are similar to bonds issued under a securitisation, except that bondholders under a covered bond have recourse to both the pool of assets backing the bond and to the issuer itself, as opposed to bonds issued under a securitisation where the bondholders have recourse only to the assets backing the bonds.
+ covered bond
A bond that is backed, or "covered," by a pool of mortgages or other assets, which mortgages or assets remain on the balance sheet of the issuing bank or financial institution, in contrast to a securitization, in which the assets are typically sold to an SPE. Recourse of investors in covered bonds is to the pool of assets as well as to the issuing bank or financial institution.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • Covered bond — Covered bonds are debt securities backed by cash flows from mortgages or public sector loans. They are similar in many ways to asset backed securities created in securitization, but covered bond assets remain on the issuer’s consolidated balance… …   Wikipedia

  • Covered Bond — Securities created from public sector loans or mortgage loans where the security is backed by a separate group of loans. Covered bonds typically carry a 2 10 year maturity rate and enjoy relatively high credit ratings, depending on the quality of …   Investment dictionary

  • Covered Bond — Ein Pfandbrief ist eine von einer Pfandbriefbank ausgegebene Anleihe. Der Pfandbrief zeichnet sich dadurch aus, dass dem Investor neben der Bonität der emittierenden Bank im Fall einer Insolvenz dieser Bank zusätzlich eine sogenannte… …   Deutsch Wikipedia

  • Covered bond — Titrisation La titrisation est une technique financière qui consiste classiquement à transférer à des investisseurs des actifs financiers tels que des créances (par exemple des factures émises non soldées, ou des prêts en cours), en transformant… …   Wikipédia en Français

  • Covered Bond —    A bond which has other financial instruments, such as mortgage loans, pledged as security against default …   Financial and business terms

  • European Covered Bond Council — The European Covered Bond Council (ECBC) is a platform for covered bond market participants which brings together covered bond issuers, analysts, investment bankers, rating agencies and a wide range of interested market participants.The ECBC was… …   Wikipedia

  • Bond insurance — (also known as financial guaranty insurance ) is a type of insurance whereby an insurance company guarantees scheduled payments of interest and principal on a bond or other security in the event of a payment default by the issuer of the bond or… …   Wikipedia

  • Bond — (b[o^]nd), n. [The same word as band. Cf. {Band}, {Bend}.] 1. That which binds, ties, fastens, or confines, or by which anything is fastened or bound, as a cord, chain, etc.; a band; a ligament; a shackle or a manacle. [1913 Webster] Gnawing with …   The Collaborative International Dictionary of English

  • Bond creditor — Bond Bond (b[o^]nd), n. [The same word as band. Cf. {Band}, {Bend}.] 1. That which binds, ties, fastens, or confines, or by which anything is fastened or bound, as a cord, chain, etc.; a band; a ligament; a shackle or a manacle. [1913 Webster]… …   The Collaborative International Dictionary of English

  • Bond debt — Bond Bond (b[o^]nd), n. [The same word as band. Cf. {Band}, {Bend}.] 1. That which binds, ties, fastens, or confines, or by which anything is fastened or bound, as a cord, chain, etc.; a band; a ligament; a shackle or a manacle. [1913 Webster]… …   The Collaborative International Dictionary of English

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”