Scribd Logo
Upload

Welcome to Scribd!

  • WaMu and Covered Bonds.

    Uploaded by

    Varun Abbineni
    45 views3 pages
    Covered bonds are similar to mortgage-backed securities and asset-backed securities in that they are derived from pools of mortgages or public sector loans, but unlike those derivatives the loans remain on the issuer's balance sheet. Washington Mutual was the first US bank to issue euro-based covered bonds in 2007, but the declining housing market and economic distress led to restructuring, downgrades of WaMu's covered bonds, and plunging share prices, until JP Morgan-Chase acquired WaMu's assets and some liabilities, including the covered bonds, exactly one year later.

    Original Description:

    Presentation of Washington Mutual's collapse, and a brief introduction to covered bonds.

    Original Title

    WaMu and covered bonds.

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Covered bonds are similar to mortgage-backed securities and asset-backed securities in that they are derived from pools of mortgages or public sector loans, but unlike those derivatives the loans remain on the issuer's balance sheet. Washington Mutual was the first US bank to issue euro-based covered bonds in 2007, but the declining housing market and economic distress led to restructuring, downgrades of WaMu's covered bonds, and plunging share prices, until JP Morgan-Chase acquired WaMu's assets and some liabilities, including the covered bonds, exactly one year later.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    45 views3 pages

    WaMu and Covered Bonds.

    Uploaded by

    Varun Abbineni
    Covered bonds are similar to mortgage-backed securities and asset-backed securities in that they are derived from pools of mortgages or public sector loans, but unlike those derivatives the loans remain on the issuer's balance sheet. Washington Mutual was the first US bank to issue euro-based covered bonds in 2007, but the declining housing market and economic distress led to restructuring, downgrades of WaMu's covered bonds, and plunging share prices, until JP Morgan-Chase acquired WaMu's assets and some liabilities, including the covered bonds, exactly one year later.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 3

    Washington Mutual

    Covered Bonds

    Covered Bonds

    Created from pools of mortgages or public sector loans

    Backed by separate groups of loans

    Derivatives, similar to mortgage-backed securities / asset-backed


    securities

    Unlike ABSs and MBSs, covered bonds remain on issuers balance sheet

    Usually awarded high credit ratings

    Generally have a maturity rate of 2 10 years

    Washington Mutual

    WaMu first US bank to issue based covered bonds in September 2007

    Housing market distress -> Declining prices -> US economy faltered

    WaMu covered bonds started sinking

    Restructuring, rating downgrades, share price plunged

    Uncertainty over FDIC bailout

    Exactly one year later, JP Morgan-Chase acquired all WaMu assets and
    some of its liablities (covered bonds, deposits, secured debt)

    You might also like