The only Greek benchmark covered bond, an originally Eu1.5bn National Bank of Greece issue maturing tomorrow (Friday), will be repaid in full and on time, underlining the attractions of the asset class versus govvies – but a final WaMu redemption has prompted a monstrous comparison.

“The principal repayment of the one and only publicly issued euro benchmark covered bond of a Greek bank is still a peculiarity and might confirm the view of many investors that covered bonds have been and still are the safest asset class,” says Michael Spies, covered bond and SSA strategist at Citi, “even safer than sovereign bonds.”

Investors have nevertheless had to ride a rollercoaster from the bond’s launch in September 2009, when over Eu5bn of orders were reportedly placed for the then triple-A rated paper at a level some 30bp over Greek government bonds. Ratings dipped as low as Caa2 and the cash price as low as 55, according to Spies – not to mention the brinksmanship and uncertainty of last year’s events in Greece that bondholders had to live through.

But as far back as 2012 the asset class received a vote of confidence from investors when more than half of bondholders declined to participate in a cash tender offer for the covered bonds at a price of 70, which at the time represented a premium to secondary levels.

“The tender price of 70% compares with a real loss on sovereign bonds of around 73%,” notes Spies. “Although not perfectly comparable, the recovery rate on the sovereign and the tender value of the Greek covered bond could justify the market’s perception that collateralized securities such as covered bonds are the better choice than unsecured sovereign debt in times of severe stress.”

Indeed only yesterday Italy’s Cariparma priced a Eu1.5bn dual-tranche issue well inside BTPs, with covered bonds pricing inside government bonds de rigueur in most peripheral markets today.

NBG’s landmark redemption comes just days after another, namely the last bond outstanding off the first US covered bond programme, that of Washington Mutual (WaMu). A Eu2bn 10 year tranche of its inaugural transaction in 2006 was repaid on Tuesday of last week (27 September).

Could such an outcome similarly win over the US – one of the last hold-outs in covered bonds’ global march – to the superiority of the asset class? Nobody is holding their breath.

“The ‘US Covered Bonds’ project has some similarities with the Loch Ness monster,” says Ted Packmohr, head of financials and covered bond research at Commerzbank. “It is the subject of ongoing speculation, but tangible results have very rarely been reported.”