DLR loans are granted based on the issuance and sale of covered bonds (SDO) or mortgage bonds (RO).
DLR covered bonds are issued and sold through ongoing tap issues and at refinancing auctions.
All DLR bonds are gilt-edged and CRD-compliant listed securities. Compliance with CRR Article 129 (7) is ensured by quarterly cover pool disclosure based on the Label Transparency Template, which makes the bonds eligible for preferential risk treatment. Since January 1, 2008, all bond issuance has been in the form of the SDO bond series. Old RO bond series were closed for new issuance at the end-2007 and have been grandfathered as covered bonds.
The bonds are listed on Nasdaq Copenhagen. Bonds issued in DKK are repo eligible in Denmark’s Nationalbank, while bonds issued in euro enjoy ECB eligibility.
DLR Refinancing Auctions
DLR holds auctions in non-callable bullet bonds (arm bonds) in February, August, and November, respectively, in connection with the refinancing of adjustable-rate mortgage loans (arm loans) as of 1 April, 1 October, and 1 January. In May, auctions are held in non-callable variable-rate bonds (arm short bonds) in connection with the refinancing of variable-rate mortgage loans (arm-short bonds) as of 1 July.
Interest Rate Trigger
As from 1 April 2014, a legislative amendment adopted by the Danish Parliament introduced contingent maturity extension for 1-year ARM bonds if a refinancing auction fails, or if the interest rate rises by more than 5 percentage points within one year. As of 1 January 2015, ARM bonds with longer maturities as well as ARM short bonds are also covered by the new provisions. Based on the latest refinancing auctions, DLR has fixed the following interest rate triggers for bond series covered by the new provisions (‘IT’ bonds):
|ISIN||Name||YTM at last |
|Interest rate trigger based on|
YTM at last refinancing
|DK0006348834||1% Jan B 2021 IT-1 (DKK)||-0.55%||4.44%|
|DK0006349139||1% Jan B 2021 IT-1 (EUR)||-0.31%||4.69%|
|DK0006346895||1% Jan B 2021 IT-2* (DKK)||-0.42%||4.58%|
|DK0006347000||1% Jan B 2021 IT-2* (EUR)||-0.23%||4.77%|
Issuance of Senior Debt
Since 2012, DLR has issued senior secured bonds (SSBs) in order to provide supplementary collateral for DLR’s covered bonds in Capital Centre B, including for rating purposes. In addition, DLR issues loss-absorbing senior bonds in order to meet the debt buffer requirement, which amount to 2% of the unweighted loan portfolio. Read more about our issues and see prospectuses and business terms.