The covered bond market has been an important source of wholesale funding for many of the UK and Europe's leading retail banks and building societies. However, the turbulence in the global financial markets and, in particular, the knock-on effect of concerns relating to the securitisation market, caused investor demand to contract significantly in 2007 and 2008. However, there has, particularly in the last quarter of 2009, been a recent upsurge in issuance and investor interest in covered bonds. Against this background, this article examines the UK covered bond market, changes to rating agency methodologies, the ECB covered bond purchase scheme and resurgent covered bond issuance in 2009/10.

This article is part of the PLC multi-jurisdictional guide to securitisation. For a full list of contents visit www.practicallaw.com/securitisation-mjg.