FAQ Covered bonds

Yes.

The Swedish covered bond legislation fulfils the criteria set up in Article 22.4 of the UCITS directive. Both Standard & Poors and Moody's have referred to the Swedish covered bond legislation as a strong fundament of Swedbank Mortgage covered bonds.
Swedbank Mortgage covered bonds would not be automatically downgraded upon a rating downgrade of Swedbank AB or Swedbank Mortgage AB. At a certain level however, Swedbank and or Swedbank Mortgage would be required to take certain steps to maintain the AAA rating of the covered bonds, such as providing extra liquidity or collateral for derivative exposures.
No, not to the extent this would violate the liquidity matching and other matching requirements of the covered bond legislation.
For detailed information regarding the composition of the cover pool, please use this link: Cover pool
No.
No.

The Swedish covered bond legislation allows for mortgage loans in the cover pool to be secured by real property in all countries within the EEA. However, the articles of association of Swedbank Mortgage AB (publ) only permits mortgage loans secured by real property situated in Sweden, Denmark, Finland and Norway.
No.
The calculation method we use is based on calculating LTV on property level, meaning that the summary of all mortgages per property is divided with the market value of the property. Valuations of properties are based on the original valuation and then continually up- or downgraded with a real estate price index from Sweden Statistics. Together with all other Swedish covered bond issuers through the Association of Swedish Covered Bond Issuers (ASCB) we have agreed on the way to calculate and publish loan-to-value. The purpose for this is to be more transparent and that debt investors should easily be able to compare the different ltv-ratios. Read more about the way of calculating LTV on: www.ascb.se
Since Swedbank Mortgage is a separate company, investors in bonds issued by Swedbank Mortgage AB run a credit risk only on Swedbank Mortgage AB. Even more important, investors in Swedbank Mortgage AB covered bonds run a credit risk only on a pool of assets consisting of mortgage loans, public sector loans, forest & agriculture loans and sometimes government bonds and cash.
No. A rise in property values does not in itself enable an issuer of covered bonds to increase issuing volumes. Covered bonds have to be nominally matched against the face value of the loans in the cover pool, so issuing volumes can only be increased to the extent borrowers increase their borrowings.

FAQ Covered bonds

Is the covered bond legislation in Sweden as strong as in other countries?

How would Swedbank Mortgage covered bonds be affected upon a rating downgrade of Swedbank?

Would it be possible for Swedbank to use cash-flows generated by the cover pool assets to cover losses in other parts of the Swedbank Group, such as Baltic Banking?

What is the composition of Swedbank Mortgage's cover pool?

Are there any Baltic loans in the Swedbank Mortgage cover pool?

Would it be possible for Swedbank Mortgage to include Baltic loans in its cover pool?

Are there any loans in the cover pool secured by real property in Denmark, Finland or Norway?

Why do the Loan-To-Value ratios calculated by Swedbank Mortgage differ from those calculated by the rating agencies when describing the cover pool?

Why is the credit risk connected to covered bonds issued by Swedbank Mortgage AB different from the general credit risk on Swedbank?

Has the rise in Swedish property values during recent years made it possible for Swedbank Mortgage AB to automatically issue larger volumes of covered bonds?