15 June 2012 7:00am

A recent resurgence in covered bond issuance by Australian financial institutions provides evidence of deteriorating market conditions.

The four major banks have continued issuing covered bonds since the first issues were made in November last year. But the initial rush of issuance lasted only until early March, with there being just a trickle of issuance more recently.

Suncorp flagged the possibility of changing conditions with its A$1.6 billion covered bond debut on May 30. The next day, ANZ sold HK$400 million of three-year covered bonds. The floating-rate bonds were...