Irish Asset Covered Securities

Towards the end of 2001, the Irish Asset Covered Securities Act was passed allowing banks recognised by the Central Bank of Ireland as Designated Credit Institutions (DCIs) to issue Irish Asset Covered Securities. 

The first issue in the Irish Asset Covered Securities market is due in March 2003 and will be brought by a well-known German name, the... 

A maximum of 10% of the cover pool can be commercial property loans and substitution assets cannot exceed 20%. To limit cash flow mismatching risk, the Irish bonds exhibit tight matching requirements. For example, the nominal value of the cover assets must at all times exceed the value of the corresponding securities. The aggregate interest from the assets must also exceed that of the covered bond and the currency of the cover assets must be similar to the related bonds. In addition to this, the duration of the cover assets must be greater than the duration of the bonds. 

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