Covered Bond Blog

About the blog

Complementing our portfolio of covered bond conferences, this blog provides year round comment on the global covered bond market, its participants and future. Our opinion pieces cover the core European markets, as well as Canada, Australia and the new emerging covered bond markets in Asia, Eastern Europe, Africa and Latin America.

About the main blogger

Richard Kemmish is a covered bond consultant, and editorial consultant for Euromoney Conferences. He has worked in the covered bond market for 12 years and in housing finance more generally for 20. Richard Kemmish Consulting Limited provides structuring services, advice and, most importantly, education on all aspects of the covered bond market.

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Blog Homepage

  • The end of the purchase programme: supply side

    06 Oct 2017 |

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  • The end of the purchase programme: Economics 101

    29 Sep 2017 |

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  • The harmonisation debate: please vote

    12 Sep 2017 | Richard Kemmish

    In my previous post I mentioned the new on-line polling that Euromoney Conferences will be using at the Congress in Barcelona. Whilst the previous panel that I discussed the questions for was on emerging market covered bonds, a subject close ... read more

  • New issuers: please vote!

    11 Sep 2017 | Richard Kemmish

    At the covered bond conference in Barcelona this year Euromoney Conferences will be asking for the audience’s input. For many of the sessions the moderator has selected a couple of key questions for the subject of the panel and ... read more

  • Different understanding of triggers

    08 Sep 2017 | Richard Kemmish

    Is it really prudent to have two ‘regulatory’ definitions of acceptable trigger events? read more

  • The investors speak

    08 Sep 2017 | Richard Kemmish

    As part of the run-up to the Euromoney/ECBC Covered Bond Forum in Barcelona, Euromoney Conferences has asked three leading investors their opinions on the topical issues of the day. In the interests of debate - I can’t resist the ... read more

  • Rates and profits: a broken correlation?

    06 Sep 2017 | Richard Kemmish

    Profitability is a problem of lower interest rates. And the covered bond market will start to feel this first when the rate cycle changes read more

  • The risk we dare not name: credit

    04 Sep 2017 | Richard Kemmish

    In my previous post on threats to the covered bond market I didn’t mention the big one, a risk so big that it warrants an entire panel all to itself in the forthcoming Barcelona conference: credit. read more

  • The calm before the storm

    22 Aug 2017 | Richard Kemmish

    Is the biggest threat to the covered bond market growing irrelevance? read more

  • What is normal?

    21 Aug 2017 | Richard Kemmish

    I am getting quite annoyed at the number of people who have pointed out that BBVA and CFF now trade in line with one another (at some maturities at least) as evidence that pricing in the covered bond market is ... read more

  • New wine in old bottles (continued)

    15 Aug 2017 | Richard Kemmish

    So we will have to upgrade most of the old covered bonds to the new European rule book (see previous post), the question remains: how? read more

  • New wine in old bottles

    08 Aug 2017 | Richard Kemmish

    Just what will happen to old bonds under new covered bond laws? Grandfathering rules and dual programmes are two answers, but they could throw up more problems than they solve. read more

  • Do you like my new haircut?

    07 Aug 2017 | Richard Kemmish

    It has been heavily rumoured that the ECB will this autumn announce that conditional pass through covered bonds will have a new uniform hair-cut when presented for repo instead of the existing size, maturity and basis dependent hair-cut grid. read more

  • Winding down

    03 Aug 2017 | Richard Kemmish

    The ECB have announced that covered bonds issued by wind-down entities will not be eligible for their purchase programme - at least, for purchase under the purchase programme. Those that they have already bought will presumably, hopefully, still be ok - and ... read more

  • Should you be scared of the great unwind?

    31 Jul 2017 | Richard Kemmish

    Looking at the numbers rather than the words, it seems that the ECB has already started to taper its covered bond purchase programme. Whatever the future for quantitative easing in total, the covered bond market appears to have done its ... read more

  • A three tier market?

    27 Jul 2017 | Richard Kemmish

    I am a firm believer that the covered bond market is sophisticated enough to cope with two tiers – tier 1 being what we have now, tier 2 being ‘European Secured Notes’ or some other designation for bonds that are covered ... read more

  • Conditional pass-throughs: the dangers of diversity

    26 Jul 2017 | Richard Kemmish

    The recent Bank of Queensland deal has, as was argued by Bill Thornhill in GlobalCapital, added yet further to the structural diversity that is the conditional pass-through market. He also suggests that this is potentially problematic for the goal of ... read more

  • Structuring ESNs 2: the drawbacks of using residential mortgages

    17 Jul 2017 | Richard Kemmish

    While residential mortgages cam make ideal structure-fodder for ESNs, there are some features that make them less than ideal assets. read more

  • Structuring ESNs 1: the advantages of using residential mortgages

    13 Jul 2017 | Richard Kemmish

    In my previous post I suggested that it was time to move on from debates about whether ESNs should happen or not to debates about what they should look like, starting with the rating. Another important aspect to consider is ... read more

  • Will European secured notes be well rated?

    10 Jul 2017 | Richard Kemmish

    We have spent far too long discussing the idea of European Secured Notes – covered bonds in all but name backed by non-traditional assets – and nowhere near enough time discussing their substance. Accepting that it is going to happen, sooner or ... read more

  • Present value or Nominal? It’s not a straightforward coverage calculation

    23 Jun 2017 |

    As we know, the calculation of coverage across covered bond regimes can be on either a nominal or a present value basis. That neither approach is better - ‘it just depends’ - is an assertion so often repeated that it has become ... read more

  • Minimum risk levels: a tale of two 5%s

    15 Jun 2017 | Richard Kemmish

    Is it just coincidence that the only meaningful over-collateralisation number in both the covered bond and securitisation directives just happens to be exactly the same number? read more

  • The decisions parliament must make

    09 Jun 2017 | Richard Kemmish

    The proposed amendments to the European Parliament’s paper on covered bond legislation is desperately dull. I’ve read it for you and plucked out some of the more contentious points. read more

  • Over-collateralisation: One Level for All?

    07 Jun 2017 | Richard Kemmish

    Should there be a single, minimum over-collateralisation level for all covered bonds in Europe? And if so, what should it look like? read more

  • Soft bullets and when to fire them (part II)

    05 Jun 2017 | Richard Kemmish

    After my previous post’s very controversial comments about which soft bullet triggers are justified, I feel a need to explore a slightly less divisive type of trigger. read more

  • Soft bullets and when to fire them

    01 Jun 2017 |

    The question over whether an issuer can extend - without necessarily defaulting - is a fraught one read more

  • No Room for Complacency in the Covered Bond Market

    30 May 2017 | Richard Kemmish

    The covered bond market might be in good health now, but it will need regulation to keep it that way. read more

  • Safety car in this lap

    24 May 2017 | Richard Kemmish

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  • What's so different about CEE (2)?

    18 May 2017 | Richard Kemmish

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  • What's so different about CEE?

    17 May 2017 | Richard Kemmish

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