At this month's Information Management Network Barcelona conference, participants at the panel on covered bonds talked about the potential for increased issuance in the sector.

With supply in this market growing exponentially, the question at the panel was whether covered bond volume is close to reaching a limit. "There is a limit but that limit is huge," said one speaker. "We have hardly seen any issuance for paper that is dated below five years and for short-term maturities the limit is quite huge. Reducing maturities would deal with any limit problems we see at the longer end and if transactions end up that way, there is almost no limit." In Spain, for example, the preference for cedulas structures has been in longer dated maturities, although another speaker said that banks were prepared to come to market with shorter maturity offerings if it made sense.

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