European issuers of covered bonds have sought to diversify their investor bases in recent years as European investors approach their limits in those securities, and new regulations such as Solvency II and Basel III favor issuance of covered bonds over ABS.

Jerry Marlatt, senior counsel at Morrison & Foerster, said his phone has been ringing steadily since client Royal Bank of Canada (RBC) filed a registration statement with the Securities and Exchange Commission (SEC) to issue public covered bonds in the U.S. His firm advised RBC on its filing to pursue the public offering - the first of its kind - and Marlatt said a number of European issuers have inquired about potentially following in its footsteps.

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