Covered bonds finding their feet in Asia

A slow trickle of deals suggests there is appetite for covered bonds in Asia. But there are also signs that growth will be slow.

After seven years of stop-start development, Asia’s covered bond market finally appears to be gathering steam.

South Korea’s Kookmin Bank opened the market in 2009, selling a $1 billion deal backed by pool of domestic mortgages. But although the deal caught the attention of funding officials across the region, leading to a flurry of pitch meetings with deal bankers, it was not until 2015 that the market took shape.

Singaporean banks deserve much of the credit. DBS reopened a market that had been dormant for two years in July 2015, when it raised $1 billion from a US dollar-denominated deal. UOB, a local rival, sold the...

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