IMA heralds new covered bond regime

A covered bond is a class of corporate bond which is usually issued by a bank and backed by assets such as mortgages or public sector loans. The income from the bond and the repayment of principal are secured by "ring fencing" the assets backing the covered bond from the other liabilities of the issuer. Drawn up by the Treasury and the FSA, the new regime for covered bonds came into force on March 6. It takes investor concerns into account and offers a higher quality regime than previous proposals, the IMA believes. Jane Lowe, director of markets at IMA, says: "Now that there is...