NIBC's groundbreaking and IFR's awardwinning 2013 Covered Bond Award pass-through covered bond programme in which NautaDutilh has assisted NIBC in setting up the structure of the EUR 5,000,000,000 conditional pass-through covered bonds programme and the first issue of EUR 500 million. This type of covered bond which is backed by a pool of Dutch residential mortgage loans, is globally the first of its kind. The conditional pass-through covered bond structure differs from the traditional covered bond structure, due to the absence of derivatives and inclusion of an orderly wind-down mechanism of the cover pool subject to strict conditions. This results in a better protection of the investors in case of a bankruptcy of the issuing bank. The maturity mismatch between the assets (mortgage loans) and the liabilities (the pass-through covered bonds) has been reduced significantly by eliminating the potential need for a fire-sale of cover pool assets in the event of an issuer default as a result of which the probability of losses declines. From an issuer perspective, the structure is attractive, as a pass-through construction results in a higher credit rating (AAA) than the credit rating of the issuing bank (BBB), while less over-collateral is needed. Quote IFR's:"The deal was so successful that NIBC and as many as eight other banks are looking to follow up this deal in the coming year." To see the full digital edition of the IFR 2013 Review of the Year, please click here.