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Covered bonds are generally backed both by the issuer and by a specific pool of assets. Issuers of covered bonds are generally banks and they typically issue covered bonds at tenors of 5 to 10 years, compared with a norm of 3 to 5 years for unsecured bonds. Covered bonds allow banks to diversify their investor base and reduce their funding risk. From an investor’s perspective, such bonds can be attractive because they are high-quality instruments that offer attractive yields and are often more secure than relying on the credit worthiness of the issuer alone. Covered bonds usually trade at lower yields to corporate debt because of this. From an issuer perspective covered bonds can be a low-cost way to expand the business in preference to issuing unsecured debt instruments.