Covered Bonds: This is an issue grade debt security that is secured by a mortgage on movable or immovable property. In exceptional cases, a secured bond may be backed by another company, bank, government or municipal guarantee. A secured bondholder not only has this right but also guarantees that he will receive from its issuer the amount or equivalent value of the property within a specified time period. In addition, a secured bond entitles its owner to a one-time or recurring return in the form of a percentage of its original value. The issuer who issued the secured bond has sole responsibility for fulfilling it.

Covered bonds are debt securities issued by financial institutions, typically banks, and secured by a pool of high-quality assets, such as mortgages or public sector loans. These assets remain on the issuer's balance sheet but are legally ring-fenced to protect bondholders in case of the issuer's insolvency. This dual protection structure makes covered bonds a low-risk investment, often yielding lower returns than unsecured bonds but offering higher security. Originating in Europe, covered bonds are now used globally, providing a reliable funding source for banks while offering investors a stable and secure investment option. Their regulatory framework ensures transparency and safety, making them attractive to conservative investors seeking steady income with minimal risk.

Covered bonds are debt securities issued mainly by banks and backed by a pool of high-quality assets, such as mortgages or public sector loans. What makes them different from regular bonds is dual protection. Investors have a claim on both the issuing bank and the underlying asset pool if the bank defaults. These assets stay on the bank’s balance sheet and are closely regulated, which adds an extra layer of security. Because of their low risk profile, covered bonds usually offer lower returns than unsecured bonds but provide higher safety and stability. They are widely used in Europe as a reliable funding tool and are attractive to conservative investors seeking steady income.