The Covered Bond Label is effective as of today (Wednesday), with a Label Foundation and website operational on schedule and covered bonds with a face value of more than Eu1.1tr qualifying under the European Covered Bond Council-led initiative.

The way is therefore open for the first new issues carrying the label to be launched among the supply expected at the start of the year. A group of the most active lead managers in the covered bond market previously agreed to set off issuers’ initial label costs against the fees they receive for arranging inaugural labelled benchmarks.

Applications for the label were taken from the middle of 2012 and, according to the ECBC, as of yesterday (Tuesday) 66 covered bond issuers had applied for an aggregate 80 cover pool labels, with most of these institutions having completed the validation procedures necessary for their profiles and data to be listed publicly on the website, coveredbondlabel.com. More than 3,400 bonds are listed so far.

“The Label website is the outcome of a consensus based market initiative undertaken by the covered bond community, which has shaped a unique qualitative and quantitative data warehouse for the covered bond market and established a clear qualitative perimeter around this asset class,” Luca Bertalot, head of the ECBC, told The Covered Bond Report.

“Over the last few months, the entire covered bond community has agreed on a common definition of what a covered bond is and designed a transparency road-map offering detailed covered bond market data, comparable cover pool information and legislative details on the legal frameworks protecting bondholders’ rights.”

National templates for standardised reporting of cover pool data for 14 jurisdictions have also been completed on the basis of guidelines that form part of the Covered Bond Label Convention.

“The commitment to enhance the transparency in the covered bond market through the establishment of the Covered Bond Label is not limited to the issuer community,” added Bertalot. “In fact this initiative has been based on an intense and constructive dialogue with the investors’ community and major national and European authorities, as well as with the support of main law firms active on the covered bond space, i.e. Clifford Chance, Allen & Overy and Linklaters, which have followed the creation of the Label Foundation and its website.”

According to Bertalot, Bloomberg and EuroMTS will include in bond descriptions whether or not a covered bond is labelled. He said that the website will be officially presented at the ECBC’s upcoming plenary meeting, in Rome on 21 March.

The entity operating the Covered Bond Label is a foundation under Belgian law, while a Label committee comprising members of the ECBC steering committee is in charge of the process, with support from the ECBC secretariat and input from a Label Advisory Council.