Fixed-income fund managers would welcome the entry of lower-rated issuers into the covered bond market, although they fear small issuers would be hard-pressed to meet their liquidity requirements.
Delegates at yesterday’s Euromoney covered bond forum in Sydney focused on the role non-AAA issuers might play in the development of the Australian covered bond market.
So far, the Big Four banks and Suncorp have issued about A$30 billion of covered bonds – all of it rated AAA. These issuers' total issuance capacity is $120 billion to $130 billion (given they may use this form of...
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