Covered Bond | Practical Law

Covered Bond | Practical Law

Covered Bond

Covered Bond

Practical Law Glossary Item 4-500-3949 (Approx. 2 pages)

Glossary

Covered Bond

A bond that is backed or covered by a pool of mortgages or other assets, which mortgages or assets remain on the balance sheet of the issuing bank or financial institution, in contrast to a securitization, in which the assets are typically sold to a Special Purpose Entity (SPE). Recourse of investors in covered bonds is to the pool of assets as well as to the issuing bank or financial institution.