Singapore covered bond first explained

Author: Ashley Lee | Published: 6 Jul 2015

DBS has become the first bank to sell a covered bond under Singapore’s Covered Bond Act, despite a lack of clarity over how to create or define the product under the new rules.

The Monetary Authority of Singapore (MAS) first issued a consultation paper on rules for covered bonds in Singapore in March 2012. However it took more than three years for the first to come to market, with DBS establishing its first domestic covered bond programme on June 16 of this year.

The $10 billion programme is yet another step forward for the product in Asia; Korea’s Kookmin Bank also sold the first legislative covered bond from Korea in the last month.

Andrew Vickery, partner at Linklaters in London, believes there are key differences between the two regimes:...