Low risk to NZ covered bonds from Auckland property correction, Fitch says

Tue, 18 Aug 2015

By Jonathan Underhill Aug. 18 (BusinessDesk) - New Zealand's major banks' covered bonds, which stand at about $14 billion, are at low risk from any correction in the Auckland property market because they're backed by a 'cover' pool of mortgages with a relatively low loan to value ratio (LVR), Fitch Ratings says. As at June 30, some $20 billion of residential mortgages in New Zealand were encumbered by covered bond programmes, of which 44 percent were against properties in Auckland, Fitch said. But the weighted-average LVR for mortgages i...

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