The Financial Post reports in its Wednesday edition that covered bonds are AAA-rated securities issued by banks that give investors two types of protection -- the credit rating of the banks, and an underlying pool of uninsured residential mortgages. The Post's Barry Critchley, writing in Off the Record, says that to the extent residential mortgages do not throw off enough cash to meet the interest and principal repayments, investors rely on the credit of the banks. The latest example played out Tuesday when Bank of Nova Scotia launched a five-year U.S.-dollar covered bond. The bank hoped to raise $2.5-billion (U.S.) from the offering. The bonds were issued under Scotiabank's $20-billion (U.S.) global program at a yield of 1.988 per cent. Mr. Critchley says the terms and flexibility make such borrowings attractive. Depending on the currency, yields vary from less than 50 basis points to above 2 per cent; issuers can offer either fixed or variable rate securities and in a variety of currencies. He adds that since 2013, issues have been denominated in Canadian, U.S. and Australian dollars, as well as Swiss francs, euros and pounds. No CMHC-insured mortgages can be included in the pool of residential mortgages.