Alpha Bank Romania is preparing what is set to be the first covered bond programme in the country, it announced yesterday (Thursday).

In 2015 a new Romanian covered bond law was passed to update a mortgage bond framework from 2006 that was never used, but no covered bonds have been issued under the new legislation yet either. This was partly the result of other mortgage developments in Romania that undermined the potential for covered bond issuance.

Alpha Bank Romania now looks set to kick off issuance with its announcement yesterday that it is preparing a programme under the 2015 law.

The Romanian subsidiary of Greece’s Alpha Bank said the establishment of a EUR1bn-equivalent mortgage-backed programme was approved at a general meeting of its shareholders.

Announcing the move, Alpha Bank Romania said that the covered bond programme continues its pioneering tradition in banking in Romania, citing its launch of the first 10 year mortgage loan in the early 2000s, “an initiative that led to the creation of a local mortgage market”.