New Zealand’s Kiwibank has set up a covered bond guarantor, the Kiwi Covered Bond Trust, and has selected loans to transfer to the trust to establish and facilitate the bank’s covered bond programme, it said today (Tuesday).

The developments were set out in the issuer’s latest quarterly disclosure statement, which all registered banks operating in New Zealand are required to publish. Kiwibank said that it set up the Kiwi Covered Bond Trust to hold Kiwibank housing loans and to provide guarantees to certain debt securities issued by the bank, and that guarantees provided by the Trust have a “prior claim” over the assets of the Trust.

The trust was set up on 23 January, and on 19 February selected loans were transferred to the trust in order to establish and facilitate the bank’s covered bond programme, said the issuer.

These recent moves come after Kiwibank in May 2012 incorporated Kiwi Covered Bond Trustee, with Fitch in June having noted that the bank was planning to issue covered bonds to help lengthen its funding maturity profile. A spokesperson for Kiwibank at the time briefly outlined to The CBR the bank’s thinking regarding covered bonds. (See here for previous coverage.)

Draft New Zealand covered bond legislation is in the country’s parliament at present, with a second hearing on the bill underway. The latest debate on the bill took place on Thursday, but was interrupted. (See here for the latest coverage of parliamentary discussions of the legislation.)