Australia's major banks need to be mindful of the consequences for investors of unsecured senior debt, and the pricing of that senior debt, as they scamper to sell covered bonds, ANZ chief executive Mike Smith said yesterday.ANZ is moving quickly to bring a covered bond to market. Fitch Ratings published a review of ANZ's debut issue yesterday, which is supported by A$3.5 billion in home loans.The bank may be marketing the bonds, at least in part, to US investors, according to a media statement released last night.The bank has tipped 11,800 loans into this debut pool, with an average loan size of $296,000, an average seasoning of 15 months and a loan-to-valuation ratio of 67 per cent. None of the loans in the pool carry mortgage insurance, so the maximum LVR may be below 80 per cent.Speaking at the media briefing following the release of full-year results for the bank, Smith said, "Covered bonds are quite interesting. They seem to be the new product in terms of acceptance to the global investor."Smith, a periodic critic of the Australian Prudential Regulation Authority, complimented the regulator for limiting the potential issuance of covered bonds to eight per cent of a bank's Australian assets."Where does that leave your senior debt holders?" Smith asked, referring to a tendency of banks overseas to tip their higher quality assets into covered bond pools.Smith also said that the major buyers of covered bonds in Europe over recent months were other banks, which wanted the securities for their liquidity books and were wary of sovereign debt.