Fitch: 2014 Likely to be the Year of Asian Covered Bonds

(The following statement was released by the rating agency)

Link to Fitch Ratings' Report: APAC Covered Bonds Quarterly - 4Q13

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=735636

SYDNEY, February 16 (Fitch) Fitch Ratings says in a special report published 
today that Korea and Singapore's introduction of formal covered bond regimes in 
the last quarter of 2013 will pave the way for an increase in covered bond 
issuance in Asia, and more diversified offerings for investors in the asset 
class.

New Zealand also enacted legislation for its covered bond framework in late 
November 2013. Issuers now have nine months from the date of royal assent to 
make the necessary changes to their programmes for them to be registered under 
the legislation. Furthermore, New Zealand covered bond programmes were also 
considered in a recent proposed change to Fitch's covered bond criteria to widen 
the ratings gap between covered bonds and senior unsecured debt. This proposal 
follows developments in Europe with the European Council's Bank Recovery and 
Resolution Directive.

2013 ended positively for Australian issuance, with the highest level of 
quarterly issuance seen since 3Q12. Total issuance in 2013 came to AUD18.9bn. 
New Zealand only saw a single issue in the last quarter, bringing total issuance 
for the year to NZD1.8bn. Fitch expects issuance levels in 2014 for both 
countries to reflect those of 2013.

Three covered bond programmes increased their cover pools in 4Q13, with National 
Australia Bank (AA-/Stable/F1+) leading the way with an increase of AUD2.7bn in 
loans. Outside of this, underlying loan assets remained relatively stable during 
4Q13. Cover pool credit quality and characteristics have remained largely 
unchanged across Australia and New Zealand. 

Data reported in "APAC Covered Bonds Quarterly - 4Q13" is as at December 2013. 

The report is available at www.fitchratings.com or by clicking on the link 
above.

Contacts:

Claire Heaton

Director

+61 2 8256 0361

Fitch Australia Pty Ltd., Level 15, 77 King Street, Sydney NSW 2000

Ben McCarthy

Managing Director

+61 2 8256 0388

Related Research:

Exposure Draft: Impact on Covered Bond Rating Criteria From Advances in Bank 
Resolution Frameworks

Media Relations: Iselle Gonzalez, Sydney, Tel: +61 2 8256 0326, Email: 
iselle.gonzalez@fitchratings.com.

Additional information is available on www.fitchratings.com.

Applicable Criteria and Related Research: 

Exposure Draft: Impact on Covered Bond Rating Criteria From Advances in Bank 
Resolution Frameworks

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726871

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