Covered Bonds in the United States - Latest News

Updated: 12/27/2025


What is a covered bond? Perhaps that is the logical place to start for many before dealing with offerings and policy and issues. See What are Covered Bonds.

See all the data on U.S.$ and Canadian bank covered bond activity since 2007 at Data Tables.

See Mayer Brown's Covered Bonds - At A Glance for U.S.$ covered bond statistics for the period 2010 through 2025.

Commentary

Recent Posts. See our most recent posts on covered bonds:

Jan 2025- Reg AB II - President Trump has nominated Paul Atkins to be the next Chairman of the SEC. Paul was previously a Commissioner at the SEC from 2002 to 2008. There is talk that the new Chairman wants to address the Reg AB II changes that require residential mortgage securitizations (RMBS) to provide loan level disclosure for 273 data items for each loan in a securitization pool. As a result of those requirements, no new RMBS offerings have been registered with the SEC since the changes became effective in 2016.

This effort ties into the new administration’s goal of removing the GSEs (Fannie Mae and Freddie Mac) from receivership imposed on them in 2008 during the financial crisis and privatizing them. There is a concern that privatization cannot be accomplished unless there is a strong private sector mortgage market and SEC registered RMBS is felt to be a critical part of that.

Note that relaxation of the loan level data requirements for SEC registered RMBS could also open the possibility of restarting the SEC registered covered bond programs the Canadian banks abandoned in 2016.

Jan 2025- A New Administration - eight years later another Trump administration. What does it mean for covered bonds? Obviously way too early to tell. Once again we are hearing that the administration intends to move to address Fannie Mae and Freddie Mac. However, too early to know if covered bonds will play a role in any housing finance system, but we will be following closely.

Jan 2019- The American Banker is reporting that “There’s now a confluence that’s been built around the need to really do a deep dive on national housing policy itself, which housing finance is just one important element,” according to David Jeffers, the executive vice president of policy and public affairs at the Council of Federal Home Loan Banks.
Jan 2019- Urban Institute Report on U.S. Housing.  See our new post ( U.S. Housing Overview.) on the Urban Institute Report on U.S. housing and the dominance of the GSEs in housing finance.   The GSEs are virtually the only game in town.  Is that risk to the taxpayers worth it?  Why?
Dec 2018- NY Fed Study on Housing Finance  The New York Federal Reserve Bank has released an Economic Policy Review entitled The Appropriate Role of Government in U.S. Mortgage Markets.  Given the conservatorships of Fannie Mae and Freddie Mac, one wonders why it took so long to ask this question.  Nevertheless, this review represents a welcome attempt to inject some rationality into U.S. housing finance. As the Economist reported yesterday, we have accidentally nationalized the U.S. mortgage market at a cost of something like one percent of GDP annually.  It is high time to rely more on the private capital markets and less on government fiat for housing finance.  The Economist believes the taxpayer savings would be substantial.

Starting on page 63 there is a comparison of U.S. and Danish mortgage financing and a recommendation that policy makers look at the Danish use of capital markets to finance mortgage loans using covered bonds.
July 2018- GSE Progress?  The White House has proposed a plan for reorganization of the Government, which includes a plan for reorganization of the GSEs that has a political twist that might actually make a difference.  "Reform of the Federal Role in Mortgage Finance" begins in page 79 of the White House proposal.  The plan would fully privatize Fannie Mae and Freddie Mac and give them access, together with other private entities, to a Government guarantee for a fee. Under the plan a new Federal entity would create and regulate a market for Federal guarantees.

The interesting political twist is that Fannie Mae and Freddie Mac would not longer be responsible for assisting low income borrowers.  Instead that role would shift to the Department of Housing and Urban Development.  Fannie and Freddie would lose their Federal charters and would no longer be the focus of political infighting over federal assistance for low income residential mortgage loan borrowers.  Perhaps with the removal of that responsibility Fannie and Freddie will become less political and some real progress could be made in creating a rational structure for providing Federal support for residential mortgage loans.
Jan 2018- What a difference a year makes! - As we move into 2018 there isn't a whisper of covered bond legislation in the United States.   Nothing!   The resurrection of the GSEs in their old form seems to on the agenda.   Amazing how short memories are.   All is forgiven.   $180 billion of bail-out cash is no big thing.   We could do it again if need be, but of course this will never happen again.   Everyone is born again!   And what is the definition of "madness"?

Canadian Issuers

maple leaf Dec 2025 - 2026 is expected to be a year of heavy issuance for Canadian banks as 60 series of outstanding covered bonds will mature in 2026. Maturities fall across 6 currencies as follows:
Curr # Total
€ 23 24,650
$ 11 13,700
C$ 4 4,400
£ 5 10,100
A$ 8 9,200
CHF 5 1,260
See Canadian Issuance.
See also GlobalCapital.

2025 was not a year of heavy issuance after all. Only 22 offerings came to market, marking two slow years in a row for Canadian banks.
Jan 2025- 2025 is likely to be a more active year for the Canadian banks as 2024 was a remakably slow year for them (see below).
Jan 2025- 2024 was a slow year for Canadian issuance of covered bonds. Canadian banks came to the market with 31 offerings of covered bonds in $, €, £, C$, A$ and CHF currencies compared to 69 deals in 2023.   Many 2024 offerings were reverse inquiries of less than benchmark size.   The distribution of offerings across currencies was as follows:
Curr # Total
€ 14 13,350
$ 5 5.075
C$ 1 1,000
£ 5 4,350
A$ 4 2,300
CHF 2 440
See Canadian Issuance.

Other US$ Issuers

Jan 2025- USD offerings by non-Canadian banks was quite low in 2024. There were 10 offerings for a total of $8.9B. Only three such banks, LBBW, Santander and newcomer Shinhan Bank of Korea issued in USD.   Note that issuance volume and frequency for foreign banks is largely determined by cross currency swap costs of converting the USD proceeds to their home currency.

Hot Topics

Jan 2025- Equivalence - perhaps no topic is as important to non-EU issuers of covered bonds as equivalent treatment of their bonds for EU bank capital purposes. See, e.g., the ECBC's statement or S&P's statement on equivalence and Fitch's statement that non-EU covered bonds have similar risk. The absence of equivalent treatment means that non-EU covered bonds do not price as favorably as EU covered bonds.

Regulatory Developments

ABS Concept Release. On September 26, 2025, the SEC published a concept release on residential mortgage-backed securities disclosures. See ABS Release. Of interest as well is the statement of Chairman Paul Atkins on the release. In his remarks, Chairman Atkins said "[t]he concept release is the first step in the Commission’s efforts to revitalize the public market for RMBS and modernize the agency’s regulations of ABS." It may also be the first and necessary step in addressing the conservatorship of the GSEs.

A possible parallel approach might be to enable U.S. issuers to issue covered bonds. Why not enable another working alternative to give us the best chance of supporting the housing finance market? See Use CBs to Restart the PLS Market.
Basel III Endgame - U.S. banking agencies announced proposed final Basel III regulations, which would have the effect of significant increases in capital requirements for banks, including foreign banks, operating in the U.S. See the full rule proposal.
Bank of Canada - The Canadian central bank announced the eligibility of covered bonds in its repo porgram. Now Canadian banks can access liquidity in the same manner as EU banks. See the announcement.
BCBS - Basle has announced increased capital requirements for securitization exposures. See the full report.
Volcker Rule Amendment - The Volcker Rule was amended and provides some important clarity. See the full amendment.
Final Risk Retention - The SEC has finalized its risk retention rule for securitizations.  See the full text of the final rule.
Reg AB II and Covered Bonds - Reg AB II loan level requirements for residential mortgage securitization were viewed as an impossible burden by Canadian banks and led them to abandoning SEC registered covered bond programs in 2016 when the changes became effective.
Final Reg AB II - SEC finalizes the amendments to Regulation AB
U.S. Treasury - United States Department of the Treasury has requested comments on the private sector development of a well-functioning private label securities (PLS) market for residential mortgage loans. See the original request.
LCR in Canada Covered bonds qualify for LCR Level 2A.
Volcker Rule - only foreign bank covered bonds are carved out of the prohibitions in the rule?

Technical Notes