Press release

The European Covered Bond Council (ECBC) is pleased to announce the publication of the 12^th (2017) edition of its European Covered Bond Fact Book, which builds upon the success of previous editions and cements its place as the most comprehensive source of information in terms of market, regulatory and legislative developments and statistical data on the covered bond asset class.

With nearly EUR 2.5 tn outstanding at the end of 2016, covered bonds continue to play a key role in European capital markets, contributing to the efficient allocation of capital and, ultimately, to economic development and recovery. The EUR 481 bn of issuance during 2016 evidences the ability of the asset class to provide essential access to long-term capital market funding. Covered bonds’ consistently strong performance and quality features attract the attention of regulators and market participants worldwide, which, in turn, leads to an increasing recognition of the macro-prudential value of the asset class.

The 2017 edition of the ECBC European Covered Bond Fact Book features the following content:

• Chapter I presents an analysis of 11 key themes of the year, offering an overview of the industry’s views on these developments.
• Chapter II provides a detailed explanation of covered bond fundamentals, including reviews of legislative files such as the Capital Requirements Directive/Regulation (CRD IV/R), Liquidity Coverage Ratio and Solvency III, amongst others. This chapter also includes articles outlining the repo treatment of covered bonds by central banks, investigating the relationship between covered bonds and other asset classes, such as senior unsecured and government bonds, and describing the USD and GBP denominated covered bond markets.
• Chapter III presents an overview of the legislation and markets in 37 countries, which demonstrates the worldwide success and recognition of the asset class.
• Chapter IV sets out credit rating agencies’ covered bond methodologies.
• Chapter V provides a description of trends in the covered bond market, as well as a complete set of covered bond statistics up to the end of 2016.

With regard to the covered bond market statistics for 2016, the ECBC is pleased to announce that these are also now available on the ECBC website (here). The ECBC data covers market developments over the past 14 years for 32 different countries, this year featuring the statistical data for Turkey as well.

Since 2003, the ECBC statistics have evidenced growth in the covered bond market every year up until 2013, where it contracted. In 2016 the outstanding volumes remained virtually constant with respect to 2015, decreasing marginally by 0.42% to EUR 2,488 tn. Covered bond issuance volumes decreased by 10.73% with respect to 2015, reaching EUR 481 bn worldwide, which is in line with the average issuance since 2013.

Turkey joined the group of non-EEA countries issuing covered bonds, alongside Australia, Canada, New Zealand, Panama, Singapore, South Korea, Switzerland and the United States. In 2016, these countries accounted for 12.33% of total outstanding, thus increasing their market share by 1.03 percentage points with respect to 2015.

The European Covered Bond Fact Book 2017, featuring the covered bond statistical data for 2016, can be downloaded from the ECBC website (here). The hard copy of the Fact Book 2017 will be presented and made available at the upcoming ECBC Plenary Meeting in Barcelona on 13 September 2017. For more information on the upcoming ECBC Plenary Meeting including its draft Agenda, please refer to the event page on the ECBC website (here).

The ECBC welcomes the broad range of views expressed in this revision of the Fact Book and thanks all contributors whose enthusiasm and dedication have once again produced an outstanding publication, especially the Chairmen of the ECBC Fact Book and Statistics & Data Working Groups, Wolfgang Kälberer and Florian Eichert, respectively.

“For over a decade, the ECBC Covered Bond Fact Book has represented a clear response from the covered bond industry to the call for enhanced transparency in the covered bond space. Now, more than ever, in the light of the current debate on an EU legislative framework for this sector it is of fundamental importance to have an updated comprehensive overview of the key themes being discussed in the covered bond arena in terms of national legislative frameworks, methodologies of rating agencies and statistics.

The 2017 edition of the ECBC Fact Book provides this support and, together with the Covered Bond Label launched in 2012, is an integral part of the transparency road map currently being implemented by the covered bond community. Moreover, to meet the growing demand for high-quality information from the various stakeholders, this 12^th edition also provides a new statistic on the breakdown of covered bonds by maturity structure.”

Luca Bertalot, EMF-ECBC Secretary General