Covered bonds congest market

A FLOOD of covered bonds for sale on the market has caused indigestion, pushing prices higher.

More than €13bn (£11bn) of covered bonds have been sold this week, double the amount of this time last year, according to Dealogic.

Covered bonds give the safest form of debt for banks, offering a form of securitisation which protects investors’ interests even in the event of bankruptcy.

Yet despite the popularity of the bonds, with a record $356bn (£230bn) sold last year, investors have not been chasing deals to push prices down.