A transparency drive by the ICMA Covered Bond Investor Council and a transparency element to an ECBC covered bond labelling initiative have spurred issuers in Ireland and Portugal to expand and standardise investor reports, according to issuers and analysts.

The International Capital Market Association (ICMA) Covered Bond Investor Council (CBIC) has been developing and promoting transparency standards that it believes issuers should strive to achieve, while issuers wishing to obtain a Covered Bond Label under a European Covered Bond Council initiative are expected to disclose information on the basis of transparency templates to be developed at a national level. Labels are expected to be granted as of next year, with applications underway. (See here for previous coverage.)

The CBIC has suggested that its transparency standards could inform national transparency templates in connection with the ECBC label.

HSBC Trinkaus analysts said that the ECBC labelling initiative is beginning to bear fruit and that there are signs of cover pool reporting standards converging in some jurisdictions. They said that there are the beginnings of a move towards standardised reporting in Sweden, but identified Ireland and Portugal as two jurisdictions where investor reports have been standardised, and attributed this to the ECBC Label Initiative.

HSBC Trinkaus analysts said that Portuguese issuers’ cover pool reports appear to have a uniform look, and that public sector and mortgage cover pool reporting diverge only with respect to details.

Indeed, The Covered Bond Report understands that in Portugal the target of obtaining a Covered Bond Label under the ECBC initiative spurred the country’s obrigações issuers to agree on a template for quarterly investor reports. The first reports to be produced on the basis of this template were published in September. Efforts to enhance and standardise reporting are said to have started around the middle of this year, and in response to ECBC feedback on label applications work is underway on building a website as a central depository for issuers’ reports.

In Ireland, recent changes in the provision of covered bond information have mainly been driven by the transparency initiative by the CBIC rather than the ECBC Label Initiative, according to Darach O’Leary, head of wholesale funding at Bank of Ireland.

“The CBIC mapped out a list of information it would like to see disclosed,” he said, “and it’s up to individual jurisdictions to reach agreement in relation to those standards, and in Ireland that process has been completed with additional disclosure now being provided by issuers since September.

“The intention being that a consistent level of information is disclosed across a single jurisdiction”.

Norway was the first covered bond jurisdiction to come up with a national template in response to the CBIC initiative, with the Norwegian Covered Bond Investor Council publishing the template on the website of Finance Norway in March.

Irish issuers started working out how they would respond to the CBIC initiative in the spring, according to O’Leary, and in September for the first time published information along the lines of what had been agreed as a result.

The only additional information that is likely to be disclosed in connection with the ECBC Label, he added, is a list of all outstanding bond issues and their details across a range of fields.

“While this additional information will be helpful, we expect investors to continue to focus on underlying trends in Irish macro and residential mortgage data as well as any developments in the Irish sovereign and banking sectors.” he said.

HSBC Trinkaus analysts noted that Bank of Ireland Mortgage Bank and Allied Irish Banks Mortgage Bank have not only revised but completely aligned their reporting. EBS Mortgage Finance’s last investor report is from June, so it remains to be seen whether it has also changed and aligned its disclosure, although EBS is now a subsidiary of AIB.

The analysts pointed out that Bank of Ireland and AIB have backdated the new investor report style to go back at least four quarters, and said that the implementation of uniform reporting standards represents an important step on the path to improved cover pool transparency.