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2022 Covered Bond Label Convention

Covered bonds are debt securities, backed by mortgage, public sector or ship assets, and characterised by a twofold bondholders’ protection mechanism rooted in a dedicated covered bond legal framework.

In more details:

I - Legislation safeguards

  • The CB programme is embedded in a dedicated national CB legislation;
  • The bond is issued by -or bondholders otherwise have full recourse, direct or indirect1, to- a credit institution which is subject to public regulation and supervision;
  • The obligations of the credit institution in respect of the cover pool are supervised by public supervisory authorities.

II - Security features intrinsic to the CB product

  • Bondholders have a dual claim against:
    i. The issuing credit institution as referred to in point I b);
    ii. A cover pool of financial assets2 (mortgage, public sector or ship assets), ranking senior to the unsecured creditors.
  • The credit institution has the ongoing obligation to maintain sufficient assets in the cover pool to satisfy the claims of covered bondholders at all times.
  • Issuers are committed to providing regular information enabling investors to analyse the cover pool, following the Harmonised Transparency Template3 and in compliance with the transparency requirements of Article 129(7) of the CRR.

     

2023 Covered Bond Label Convention - fully compliant with Covered Bond Directive

Covered bonds are debt securities, backed by mortgage, public sector or ship assets, and characterised by a twofold bondholders’ protection mechanism rooted in a dedicated covered bond legal framework.

In more details:

I - Legislation safeguards

a) The CB programme is embedded in a dedicated national CB legislation;

b) The bond is issued by -or bondholders otherwise have full recourse, direct or indirect , to- a credit institution which is subject to public regulation and supervision;

c) The obligations of the credit institution in respect of the cover pool are supervised by public supervisory authorities.

II - Security features intrinsic to the CB product

a) Bondholders have a dual claim against:
i. The issuing credit institution as referred to in point I b); 
ii. A cover pool of financial assets  (limited to mortgage, public sector or ship assets), ranking senior to the unsecured creditors.

b) The credit institution has the ongoing obligation to maintain sufficient assets in the cover pool to satisfy the claims of covered bondholders at all times.

c) Issuers are committed to providing regular information enabling investors to analyse the cover pool, following the Harmonised Transparency Template  and in compliance with the transparency requirements of Article 14 of the Covered Bond Directive (Directive (EU) 2019/2162.