Covered Bonds

Our knowledge of bank regulatory issues, financial institutions and financing techniques makes us the first call for covered bond issuances by market participants.

Covered bonds are debt instruments that have recourse either to the issuing entity or to an affiliated group to which the issuing entity belongs, or both, and, upon an issuer default also have recourse to a pool of collateral, called the cover pool, separate from the issuer's other assets. The cover pool consists of high quality assets, including residential-mortgage backed securities, public debt or ship mortgages. Typically, covered bondholders have a privileged or preferential claim (embodied in statute, in Europe) against the cover pool in the event of the issuer's insolvency. By contrast, in a securitization, an investor only has recourse to the special purpose entity that issues the securities and to that issuer's assets, which include the asset pool and its cash flows. From the issuer's perspective, covered bonds remain on the issuer's balance sheet, whereas securitized assets are off balance sheet. Covered bonds are issued by depositary institutions that are regulated entities subject to supervision by domestic banking authorities, which ensures that regulators would step in if a safety and soundness issue were to arise.

We have been involved in almost $60 billion of covered bond offerings. We draw on our covered bond experience in New York and London and the unique experience of our Washington, D.C. office in dealing with the U.S. Securities and Exchange Commission, the Department of Labor, OCC, Federal Reserve and FDIC on regulatory matters critical to covered bonds. We have been actively involved in advising European issuers on U.S. dollar issuances. We have also been an active participant in the development of U.S. covered bond legislation, including discussions with the U.S. Treasury, FDIC, legislators and Capital Hill staff.

Read more about covered bonds:

• Covered Bonds Handbook

News Alerts

• Bright Outlook for Covered Bonds
• SEC Registration of Covered Bonds
• SEC Registered Covered Bonds
• Covered Bonds: 2011 – The Senate
• Covered Bonds: 2011 – The House II
• Covered Bonds: 2011 – The House
• Review of UK Covered Bond Framework
• Senate Committee Hearing on Covered Bonds
• Covered Bond Legislation Passed by the House Financial Services Committee
• Covered Bond Legislation: Is the Fourth Time the Charm?
• Hearing on Covered Bond Legislation
• U.S. Covered Bond Legislation Introduced in Congress
• An Update on Covered Bonds
• Update on the FSA’s Approach to Covered Bond Issuance and Asset Encumbrance
• Treasury Announces Best Practices for Covered Bonds
• The FDIC Offers Certainty on Covered Bonds – a step in the right direction
• Something to Talk About
• Covered Bonds and U.S. Regulators

Articles

• Time for a U.S. Alternative by Jerry Marlatt and Anna Pinedo
  First published in International Financial Law Review July/August 2013.
• A Battle over Collateral by Jerry Marlatt
  First published in International Financial Law Review March 2013.
• An analysis of covered bonds and the US market by Jerry Marlatt, Jeremy Jennings-Mares, Peter Green, Lewis Lee, Melisa D. Beck and Shurti Chandhok
  ^© This article was first published in the Capital Markets multi-jurisdictional guide 2013 and is reproduced with the permission of the publisher, Practical Law Company.
• Still Waiting on a US Covered Bond Statute by Jerry Marlatt
  First published in Euromoney Debt Capital Markets Handbook 2013.
• Coming to America by Anna Pinedo and Jerry Marlatt
  First published in International Financial Law Review July/August 2012.
• Security Blanket: Secured Debt Gains Appeal by Jerry Marlatt and Anna Pinedo
  © 2012 Financier Worldwide Limited. Permission to use this reprint has been granted by the publisher.
• "Papers, Please" by Jerry R. Marlatt
  Reprinted with permission. view additional articles at www.coveredbondreport.com.
• Where are US Covered Bonds? by Jerry R. Marlatt
  Reprinted with permission.
• Covered Bonds Staged to Become Alternatives or Complements to Securitization by Anna Pinedo and James R. Tanenbaum
  Reprinted with permission.
• The US Dollar Covered Bonds Roundtable Jerry Marlatt quoted
  First published in EuroWeek September 2010.
  Reprinted with permission.
• US Covered Bonds: Looking to Europe by Jerry Marlatt
  First published in International Financial Law Review June 2010.
  Reprinted with permission.
• Covered Bonds in the US by Anna Pinedo
  Copyright © 2010 Practical Law Publishing Limited and Practical Law Company, Inc. All Rights Reserved.
• A Separate Piece by Anna Pinedo and James Tanenbaum
  First published in Total Securitization October 21, 2008.
  Used by permission.
• Finance: Covering Your Assets by Peter Green and Jeremy Jennings-Mares
  First published in Legal Week September 18, 2008.
  Used by permission.
• The Not So New Thing - Covered Bonds by Anna Pinedo
  First published in Wall Street Lawyer September 2008.
  Used by permission.
• U.S. Covered Bonds: Coming Soon to a Financial Institution Near You by Anna Pinedo and James Tanenbaum
  First published in Euromoney Global Banking & Financial Policy Review September 2008.
  Used by permission.
• Bridging the Gap: Regulatory Moves in the U.K. and U.S. Seek to Close the Gap with Europe on Covered Bonds by Peter Green and Jeremy Jennings-Mares
  First published in Institutional Investor News: The 2008 Global Securitization Guide.
  Used by permission.
• Expanding the US Covered Bonds Market Anna Pinedo quoted
  First published in Financier Worldwide June 2008.
  Used by permission.
• Creating a Level Playing Field – A Covered Bond Framework for the UK by Peter Green and Jeremy Jennings-Mares
  First published in Financier Worldwide March 2008.
  Used by permission.
• Amidst the Turmoil, Covered Bonds Bounce Back by Anna Pinedo and James Tanenbaum
  First published in Asset Securitization Report November 2007.
  Used by permission.
• Lucrative Knock-Offs: Covered Bonds in the U.S. by Anna Pinedo and James Tanenbaum
  First published in Euromoney Global Banking & Financial Policy Review 2007.
  Used by permission.

U.S. Legislation and Resources

• Current Senate legislation
• Current House legislation
• Treasury Best Practices
• Final FDIC Statement
• FDIC Interim Policy Statement
• Bloomberg Law Podcast: Covered Bonds
  (click to listen to the podcast)
• Frequently Asked Questions about Covered Bonds 

UK Legislation and Resources

• The Regulated Covered Bonds Regulations 2008
  (SI 2008/346)
• The Regulated Covered Bonds (Amendment) Regulations 2008 (SI 2008/1714)
• FSA Regulated Covered Bonds Sourcebook
  (part of the FSA Handbook)
• FSA factsheet on the UK Regulated Covered Bonds regime
• Regulated Covered Bonds (RCB) - Questions and Answers
• FSA Regulated Covered Bonds Register
• Application for registration and other relevant forms for Regulated Covered Bonds
• FSA's 23rd October 2008 Letter to the BBA on Covered Bond Issuance and Asset Encumbrance

Download Considerations for Foreign Banks Financing in the US (2012).

See also Recent Attorney Publications for additional articles.