Covered Bond Swaps

Covered Bond Swaps

One of the problems many covered bonds have to address is the mismatch between the interest rate on the assets and the interest rate on the bonds. Richard discusses how swaps are used to address this mismatch by explaining how swaps work, explaining how they are documented and providing some examples.
Overview

Swaps are utilised to address the main issue of the mismatch between the interest rate on bonds and the interest rate on assets by finding a willing counterparty to trade with.

Key learning objectives:

  • Identify the basic problems

  • Explain how Swaps and 2-Swaps work

  • Describe how to mitigate credit risks

  • Outline the ways in which covered bonds are documented

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Summary
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Expert
Richard Kemmish

Richard Kemmish

Richard is a consultant working mainly in the covered bond market. He helps Finance Ministries and Central Banks in countries without covered bond laws to put legal frameworks in place. He has also helped the European Commission with their legislative agenda for covered bonds and related products.

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