International Presence and Activities
COVERED BOND LEGISLATIVE
FRAMEWORK COMPARISON
Issuer
Cover Assets
Structure
Slovakia
Austria - Fundierte
Bankschuldverschreibung
Universal credit institution with a prior approval Universal credit institution with a special license
for activities connected with Covered Bond
Programme
On balance sheet-but maintained in a separate credit institution acting as fiduciary
Cover assets are held for the issuer by the
cover register
Regulatory supervision and
Supervision Authority
Yes with additional requirements compared to
general banking supervision regulations.
Special supervision by NBS
FMA
Poland
Specialized credit institution
Apart from the mortgage banks, also 1 state bank
(Bank Gospodarstwa Krajowego) is allowed to
issue covered bonds in Poland.
Cover assets held on balance sheet of the issuer
but are maintained in a separate cover register
Yes, with additional requirements compared to
general banking supervision regulations.
Supervised by Polish Financial Supervision
Authority (Komisja Nadzoru Finansowego, KNF)
GERMAN Pfandbrief
The issuer of Pfandbrief is no longer required to be
a specialised bank. Any entity which is allowed to
exercise all activities of a credit institution
- Core Capital of at least 25mn eur
General Banking license
- Suitable risk management procedures
Cover assets held on balance sheet of the issuer
but are maintained in a separate cover register
France - Société de Financement de
l'Habitat SFH
Licensed specialist institutions, so-called Societe
de Financement de l'Habitat (SFH)
At parent institution, but pledged to issuer (SFH)
Transfer according to trigger event
Yes, SFH is a mortgage credit institution under
French Banking law
Yes, use of each of the respective Pfandbrief types Supervised by French banking regulator (ACP),
is subject to a license
Supervised by Bundesanstalt fur
Finanzdienstleistungsaufsicht (BaFin)
Comite des Etablissements de Credit et des
Entreprises d'Investissement (CECEI), Autorite
des Marches Financiers (AMF) and special
controller
Elligible Underlying Assets
Cover Pool Assets
Cover Pool Geography
Max LTV
Residential mortgage loans, up to 30 years
granted to retail customers
Underlying assets, substitution assets, currency
and interest rate hedging derivatives, liquid
assets
Slovakia
80%
Substitution assets
Minimum legal OC
Up to 10%
5%
Exposures to public sector entities
Mortgage loans (Mortgage loans for the purpose Exposures to public sector entities, mortgage
of this question are taken to include guaranteed loans (Mortgage loans for the purpose of this
real-estate loans.)
question are taken to include guaranteed real-
estate loans.)
Exposures to credit institutions
Austria/EEA/Switzerland
not regulated
2%
Public-sector loans, residential and commercial
EEA, OECD
Residential and commercial mortgage loans,
public-sector assets, aircraft and ship mortgages Residential property loans only
Public sector loans, Mortgage loans, Derivatives
(up to 12%), Substitute assets
Residential mortgages
Guaranteed home loans.
Securitisations (subject to certain criteria)
EEA, USA, Canada, Switzerland, Japan, Australia, Asset located in the EU, the EEA or any highly
New Zealand and Singapore
rated country
80%
Residential 80% and Commercial 60%
Up to 15%
60%
Up to 20%
Up to 15%
10%
2%on stressed present value basis
Min 5%
Liquidity Securing
Assets coverage test
Bankruptcy of parent
institution / originator(s)
Natural" matching (matching without the use of
off-balance sheet instruments) and stress
180 days coverage of negative balance of cash testing (Natural matching is taken to include
flow from Covered Bonds Programme
replacing CBS with new issues, as well as
substitute assets.)
Nominal cover.
Eligibility of Assets test applied daily.
Coverage ratio test monthly.
Yearly stress tests mandatory.
Daily frequency
Natural" matching (matching without the use of off-Coverage by nominal value and by net-present
balance sheet instruments) and stress testing
value required. Specific coverage of liquidity risk
(Natural matching is taken to include replacing
CBS with new issues, as well as substitute assets.) over a 180 day period
Nominal cover test applied daily and verifying the
relation of nominal values of cover pool to covered
bonds, relation of cover pool interest to covered
bonds interest and level of liquidity buffer. There
are additional, semi-annual tests.
In case of bankruptcy of a mortgage bank the
cover register shall constitute a separate
Assets in the cover pool are fully segregated
from the general insolvency estate of the
bankrupt bank. The general insolvency trustee
observes special procedures that are aimed to Covered bond creditors have preferential claim to satisfy claims of covered bondholders. The
extend covered bonds' maturity in the event of
bankruptcy and postpone immediate
acceleration
No acceleration of covered bonds
on the cover assets
Coverage is mandatory at all times
Assets within the cover register are exempt from
Liquidity maintained for the next 180 days and
ability to repo own issuances
Dynamic ACT, formerly 92.5% asset percentage
applied to the entire pool
Regulated by the issuer
bankruptcy estate which may be used exclusively bankruptcy proceedings. After the launching of the No acceleration of covered bonds
court appoints the curator (Kurator) who
represents the rights of covered bondholders. The
soft-bullet maturity of the covered bonds is
triggered automatically after insolvency.
insolvency proceedings, a special cover pool
administrator (Sachwalter) carries out the
administration of the cover assets
Covered bond creditors have preferential claim on
the cover assets
Independent Cover Pool
Monitor
Yes
Compliance with UCITS
Yes
Directive
Compliance with CRD
Yes
standards
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
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