Bond Report: Covered bonds offer hope for sustainable housing market (at MarketWatch)

Covered bonds offer hope to the housing market Might bring relief to mortgage-finance funk - but no send it back to heyday By Deborah Levine, MarketWatch NEW YORK (MarketWatch) -- Investors and banks are looking to jumpstart a new form of mortgage debt to help the housing market just when it needs it most. Analysts say the market for covered bonds, a form of debt used extensively in Europe and promoted by Treasury Secretary Henry Paulson last week, could grow to more than a quarter of a trillion dollars, giving a big boost to banks willingness to hand out more mortgages. "If it catches on and works for the market, it will be a way of opening up the spigots for mortgage financing," said Jerry Webman, chief economist and director of fixed income at Oppenheimer Funds Inc., which manages about $225 billion. Investors' hunger for... [read full story]