Ashurst has advised National Australia Bank Limited (NAB) as an Arranger on the first Conditional Pass-Through Covered Bond programme by an Australian bank.

The A$3.25 billion programme was established by Bank of Queensland Limited, one of Australia's largest regional banks. The Covered Bonds under the programme have been assigned provisional ratings of 'AAA' from Fitch and 'Aaa' from Moody's.

The programme contains various features that provide protection from rating downgrades, including that the bonds extend for a period reflecting the tenor of the underlying assets, rather than the shorter extension period seen in soft bullet covered bonds. Additionally, the programme contains features to regulate asset sales to repay maturing bonds and to protect collateralisation available to longer dated bonds. The covered bond swap also contains innovative extension features.

The Ashurst team was led by partner Jennifer Schlosser who was assisted by senior associate Eugene Ng (Structured Finance). Partner Jamie Ng advised BNY Mellon Trust Company of Australia Limited as a Bond Trustee, with assistance by senior associate Kevin Lu (Structured Finance).