Higher cap for Australian covered bonds

Author: | Published: 29 Mar 2011

Lawyers in Australia have welcomed last week’s exposure draft bill on covered bonds – especially the higher net asset cap.

The bill includes an 8% cap of net assets backed by covered bonds, up from initial suggestions of 5%. Authorised Deposit-taking Institutions (ADIs) had initially lobbied for a 10% limit.

"The government probably has it about right, and if it all goes...