The portfolio/ cover pool
Swedbank Mortgage only lends to real property in Sweden.
The main part of the credit collateral in the register consists of residential property. This means single family houses, condominiums and multifamily houses. Only a small part is secured by loans to municipalities and a very limited part by loans secured by commercial real property. This does well reflect the profile of the total loan portfolio.
As for geographical concentration of the collateral (the properties) in the register, these are well distributed throughout Sweden, mirrowing the typical Swedish population density.
The covered bonds of Swedbank Mortgage have been assigned Aaa by Moodys and AAA by Standard & Poors. To maintain this level, the Company has undertaken that if its short term Standard & Poors rating falls below A-1 the Company agrees, within 30 calendar days of such downgrade, to provide additional liquid assets to the cover pool or to take any other suitable action in order to maintain a sufficient level of liquidity to support the rating assigned to the covered bonds.
Funds originating from the assets in the cover pool, or from derivative contracts or issues of covered bonds, covered bond funds, will be segregated from the company's other funds by being deposited on separate cash accounts in Swedbank AB (publ), Swedbank, on a daily basis. If Swedbank's short term unsecured, unsubordinated debt rating by Standard & Poors would decline below A -2, the company will within 30 days thereof, (i) transfer the covered bond funds to a cash account in another bank whose short term unsecured, unsubordinated rating by Standard & Poors is at least A-2 and (ii) re-direct future covered bond funds to a cash account in such bank.