• Dual-recourse bonds with a claim on the issuer and a cover pool of high-quality collateral which the issuer is required to maintain dynamically throughout the term of the issue. The pool must be replenished with new assets to maintain a specified credit quality;
• Typically pay fixed rates and have “bullet” maturities in the medium to long-term (3-15 years);
• Provide investors with a priority claim on the cover pool in the event of failure of the issuer; and
• In comparison with other debt securities issued by banks, covered bonds can be considered a form of senior secured debt.