Identification of CPT and soft bullet issues and a voluntary addendum to the Harmonised Transparency Template (HTT) are being introduced for the Covered Bond Label, with a view to aligning the initiative with new ECB disclosure requirements, while sustainable deals will also be flagged.

The Covered Bond Label Foundation (CBLF) announced the moves today (Thursday) and will provide more details at European Covered Bond Council-organised events in Oslo on 5 and 6 April.

The maturity profile of covered bonds listed on the Label website will now be identifiable as either conditional pass-through (CPT), soft bullet (SB) or non-extendible, rather than simply either extendible or not, which was previously the case.

Together with this additional detail, a voluntary addendum drawn up in conjunction with stakeholders is intended to align the HTT with additional information being required by the European Central Bank from the third quarter of this year as a result of minimum disclosure requirements for covered bond ratings.

“The raison d’être of the Covered Bond Label is to increase transparency in the market by simplifying and standardising data disclosure whilst keeping abreast of new regulatory and market demands,” said Luca Bertalot, CBLF administrator and secretary general of the European Mortgage Federation-ECBC. “These new features are testament to the ability of the Covered Bond Label to respond rapidly to new regulatory requirements and market needs.”

However, Commerzbank analysts yesterday (Wednesday) raised the prospect of the ECB’s move rendering the HTT obsolete.

“The agencies shall provide the new quarterly reports in a uniform csv format for the central bank to process them in automated fashion,” they said. “Investors with access to these reports would thus have the opportunity to programme a similar, standardised pool analysis.

“Issuers will be faced with an additional workload from having to maintain in timely fashion the rating agencies’ ECB templates in addition to their individual pool reports and the HTT,” they added.

The analysts noted the ECBC’s alignment move and the potential for the HTT also to be used as a template by the rating agencies, but said it is not clear whether this will be feasible.

“If this is not the case and individual agencies stick to their own reporting formats,” they said, “it may be more efficient from an issuer’s point of view, to restrict oneself to the main reporting channels.”

A sustainability field is also being introduced for the Label website, as reported previously, with issues that meet relevant criteria being flagged alongside a green leaf icon.