- Australian covered bond issuance has slowed this
year as residential mortgage-backed securities (RMBS) pricing
has become more favourable;
- The market has seen developments in covered bond
structures, tenors and currencies since the first issuances
in late 2011;
- But given most potential issuers have already
established covered bond programmes, the lack of new issuers
could slow innovation in this space.
Although Australian covered bond issuances slowed
this year, investors are demanding increasing innovation, as
they become more comfortable with the product.
As other Asia-Pacific jurisdictions focus on
strengthening their nascent capital markets,
Australia’s sophisticated financial markets are
introducing new structures into the region. For example,
Australia was only the second country in Asia – after
New Zealand – to enact a law enabling covered bond
But since covered bonds...