ING Bank (Australia) Ltd - trading as ING Direct - has set up its first mortgage covered bond facility, giving it the capacity to raise up to A$1 billion in its first transaction. Comments from analysts at ratings agencies Fitch and Moody's indicate the facility has been structured to appeal to several types of investor.Fitch Ratings assigned its expected rating of AAA(EXP) to the covered bond transaction from ING Bank (Australia). Similarly, Moody's Investors Service has assigned its provisional long-term rating of (P)Aaa.The size of the issue has not yet been announced by IBAL. This hasn't stopped the rating agencies from commenting in advance. "For the purpose of its analysis, [we] assumed the first ABAL covered bond issuance will be up to A$1 billion of soft bullet bonds with a 12 month extension period, split over a three-year and a five-year maturity," Fitch said.In simplified terms, Fitch has applied a 'AAA break-even asset' percentage of 93 per cent, corresponding to a break-even over-collateralisation of 7.5 per cent. "There is no specific advanced resolution regime in Australia, but the regulator has the ability to resolve a bank under its regulatory powers pursuant to the Banking Act. Even so, covered bonds are not explicitly exempt from bail-in should a bank be resolved, which may result in the direct enforcement of recourse against the cover pool for the payment of the outstanding covered bonds," Fitch said.As at 30 June 2018, the total value of the assets included in the cover pool was A$1.46 billion, Moody's disclosed in a media release. The pool is comprised of residential mortgage loans, secured by properties in Australia.