Barclays Capital will be launching a new family of indices including covered bonds in a single benchmark with unsecured corporate bonds, but in an annual review of its benchmarks decided to make no changes to its existing classification of covered bonds.

The treatment of covered bonds in indices has been an issue for US-centric benchmarks, with the asset class not having historically been a part of US indices. Barclays acquired its benchmark US indices when it acquired US operations of Lehman Brothers.

However, a surge in dollar covered bond supply and the possibility of US covered bond legislation has put the issue on index providers’ agendas. BNP Paribas launched a new US dollar covered bond in July.

Barclays said yesterday (Monday), on concluding an annual review of its index rules, that it would not change the classification of covered bonds in its benchmarks, but will continue to classify them within the securitised sector of its scheme.

However, it held out the promise of dealing with the issue in new indices.

“For credit investors who invest in covered bonds, Barclays Capital will be launching a new family of global and regional corporate bond indices that include covered bonds in addition to unsecured corporate bonds within a single benchmark,” it said. “These will be available for broad corporate indices as well as narrower indices focusing on financials and banking sector debt.”