Kattevõlakirjad

Kattevõlakirjad, often translated as "covered bonds" in English, are a type of debt security primarily issued by financial institutions, particularly mortgage banks or specialized mortgage credit institutions. The defining characteristic of kattevõlakirjad is that they are backed by a specific pool of assets, known as the cover pool. This cover pool typically consists of high-quality assets, most commonly residential or commercial mortgage loans, but can also include other eligible assets like public sector loans or shipping loans depending on the jurisdiction's regulations.

The primary purpose of issuing kattevõlakirjad is to provide lenders with a stable and cost-effective source of long-term funding. By segregating and securing these loans, issuers can attract investors with a lower risk profile compared to unsecured bonds. This lower risk is reflected in the credit ratings assigned to kattevõlakirjad, which are often higher than the issuer's own unsecured credit rating. Investors in kattevõlakirjad have a preferential claim on the assets in the cover pool in the event of the issuer's insolvency, offering an additional layer of security. The regulatory framework governing kattevõlakirjad ensures the quality and segregation of the cover pool, providing transparency and investor protection. This mechanism is crucial for the smooth functioning of mortgage markets and contributes to housing finance stability.