Mortgage-covered bonds issued by Australia's four major banks increased 51.8 per cent year-on-year in the first quarter of 2016 to A$8 billion, primarily due to the refinancing of A$7.8 billion of maturing covered bonds. "This was the highest level of issuance since 1Q 12, which coincided with the start of Australia's covered bond market," Fitch noted in its APAC Covered Bonds Quarterly report for 1Q16. Macquarie Bank issued its first €500 million five-year soft-bullet covered bond from a recently established programme which Fitch rated AAA. Macquarie is the second non-major bank (after Suncorp-Metway) to join Australia's covered bond market since June 2012. Bank of New Zealand issued a NZ$300 million eight-year soft bullet bond, its first covered bond issuance in the past four years and the first local currency covered bond issue in New Zealand since February 2012, according to Fitch's records. Kookmin Bank also returned to the market in early 2016, with a 5-year US$500 million soft-bullet covered bond. All were rated AAA by Fitch, which also affirmed the AAA rating on the mortgage covered bonds by Kiwi Bank Ltd during the quarter. CBA also topped up its cover pool by A$7.6 billion. Only two issuers increased the outstanding value of their cover pools with a transfer of mortgage loans. "While the transferred loans exhibited higher loan-to-value ratios, they did not significantly deteriorate the pools' overall credit risk. This is due to the large value of well-seasoned and lower loan-to-value ratio loans already in the cover pools," said Fitch. In its covered bond investor survey for the year end of 2015, Fitch states that a clear majority of investors polled said they were switching from covered bonds to other asset classes in response to the European Central Bank's purchase program. However, 41 per cent of respondents stated the covered bond holdings would remain stable over the next 12 months. Even so, covered bonds appetite remains the strongest for non-Eurozone countries, with investment expected to increase over the next 12 months, said Fitch.