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Each of the following is a valid difference between a covered bond and a true securitization except which is not true?
A
In a covered bond, the cover pool remains on the balance sheet, but in a true securitization, loans (assets) are removed from the balance sheet.
B
In a covered bond, principal and interest are paid from issuer's general cash flows, but in a true securitization, principal and interest are paid from the cash flows of the securitized assets.
C
In a covered bond, investors have dual recourse to both the issuer and the cover pool, but in a true securitization, investors have recourse only to the securitized assets.
D
In a covered bond, the cover pool is dynamic and can be replenished, but in a true securitization, the asset pool is static.
E
Covered bonds are subject to bank regulation, while true securitizations are not regulated.
