Danmarks Nationalbank has temporarily expanded the collateral basis for borrowing in Danish kroner by banks and mortgage-credit institutes from Danmarks Nationalbank (monetary-policy loans, loans for decentralised banknote holdings and intraday credit).
Collateral may be pledged by way of state-guaranteed unsecured debt issued by banks and mortgage-credit institutes, including holdings of own bonds. This expansion expires on 30 December 2016. Until 30 December 2013 may collateral also be pledged by way of state-guaranteed junior covered bonds or SPV bonds issued on the basis of loans with state guarantee to banks and mortgage-credit institutes. The SPV bonds must fulfil certain terms and conditions set by Danmarks Nationalbank, cf. "Terms and conditions for SPV bonds". All securities must be denominated in Danish kroner or euro, and shall, with the exemption of SPV bonds, be issued by funds or corporations in the Kingdom of Denmark. Moreover, SPV bonds are only eligible upon request and the approval of Danmarks Nationalbank. Quoted securities must be traded on OMX NASDAQ Copenhagen, and all securities must be registered with VP Securities.
Banks and mortgage-credit institutes can also pledge their shares and bonds issued by companies mainly owned by a number of financial institutions jointly, cf. "List of temporarily eligible securities". It is not a requirement that the shares and bonds are traded and for shares it is not requirement to be registered with VP Securities. The possibility of using these shares and bonds as collateral can be withdrawn by Danmarks Nationalbank with 30 days notice.
According to the Danish Financial Supervisory Authority, sector company shares can be included in the banks’ liquidity statements under section 152 of the Danish Financial Business Act, provided that the shares are unencumbered and that Danmarks Nationalbank grants loans based on these securities as collateral in accordance with Danmarks Nationalbank’s commitment to the sector dated 10 August 2011, and that the liquidity requirements under this provision are not met only or predominantly by means of credit commitments, including the commitment from Danmarks Nationalbank.
Junior covered bonds, which are traded on OMX NASDAQ Copenhagen and comply with rating requirements set by Danmarks Nationalbank, are eligible collateral for borrowing in Danish kroner form Danmarks Nationalbank according to the usual terms and conditions for pledging of collateral at Danmarks Nationalbank, cf. "Pledging of collateral".
The rules for pledging the securities mentioned above, including the calculation of the collateral value, are described in "Addendum to Terms and Conditions for Pledging of Collateral for Credit Facilities".
Please contact Kristian Kjeldsen, Head of Division, tel. +45 33636151.