Covered Bond

Is a bond issued by a financial institution that remains on its balance sheet.

REMARKS

Covered bonds are created through a securitisation process.

Covered bonds pay a fixed interest rate.

The investor is protected from any claims against the issuer.

The investor is protected from any claims on the underlying assets should the issuer file for insolvency.

The covered bond market is dominated by the German Pfandbriefs.

Covered bonds are traded on the Eurex Exchange (eurexchange.com) Most corporate bonds are not covered.