Contacts: Kenneth E. Kohler, Oliver I. Ireland, Anna T. Pinedo, James R. Tanenbaum, Peter J. Green, Jeremy C. Jennings-Mares

Our knowledge of bank regulatory issues, financial institutions and financing techniques makes us the first call for covered bond issuances by market participants.  Morrison & Foerster attorneys’ extensive experience with the use of derivatives in securitization transactions, including credit default swaps, total return swaps, interest rate swaps, currency swaps and options, uniquely qualifies us to advise on covered bonds issuances, from structuring through execution.

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 usually 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.

Our practice draws on the resources of attorneys in New York, San Francisco, Los Angeles, Tokyo, Washington D.C., London and elsewhere who are experienced in general corporate, capital markets, investment management, restructuring, derivatives, banking, secured transactions, real estate, ERISA and tax-related matters. The firm’s Washington, D.C. office provides unique experience in dealing with the U.S. Securities and Exchange Commission, the Department of Labor, OCC, Federal Reserve, FDIC and OTS on regulatory matters critical to covered bonds issuances and up-to-the-minute counseling on legislative and regulatory developments.

Read more about covered bonds:

News Alerts

• 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

• 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 Mara Goldsmith and 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.

Resources

• Frequently Asked Questions about Covered Bonds
• Treasury Best Practices 
• FDIC Interim Policy Statement 
• Final FDIC statement    

UK legislation

• The Regulated Covered Bond 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 Regulated Covered Bonds Register
• Application for registration and other relevant forms for Regulated Covered Bonds

See also Recent Attorney Articles for additional articles.