Westpac provided a cover pool of NZ$2.7 billion of residential mortgages for its maiden covered bond issue of up to €1 billion. The weighted average loan-to-valuation ratio of the pool of loans covered by the bonds is 56.9 per cent, while the average seasoning is 27 months, a pre-sale report on the bond published by Moody's Investor Service shows. Moody's said 72.9 per cent of the loans are fixed-rate, while the balance is floating. The covered bond has been given a provisional Aaa rating by Moody's but must adhere to strict conditions to ensure the rating doesn't drop in future. The Aaa rating requires a committed over-collateralisation of 11 per cent. The collateral is subject to two key portfolio tests, the Asset Coverage Test and the Amortisation Test.  Loan-to-valuation ratios are not allowed to exceed 75 per cent, and any amount over the first 75 per cent is disregarded for the purpose of covered bond issuance. Loans over 90 days in arrears are also not used in the calculation of the ACT.