Company Announcement No. 52, 2015 – Negative interest rate

Nordea Kredit publishes a supplementary prospectus for covered mortgage bonds.

Bonds opened before 19 May 2015
The supplement specifies that covered mortgage bonds with adjustable rates opened for issuance before 19 May 2015 will have an interest rate floor of 0% in the event of negative interest.

This applies to the following bonds:

Security ID Reference rate
DK0002015106 CIBOR6
DK0002015296 CIBOR6
DK0002021427 CIBOR6
DK0002021500 CIBOR6
DK0002026731 CIBOR6
DK0002026814 CIBOR6
DK0002029248 CIBOR6
DK0002029594 CITA6
DK0002032549 CITA6
DK0002032622 CIBOR6
DK0002032705 CIBOR6
LU1110205314 EURIBOR3

In addition to the covered mortgage bonds shown, Nordea Kredit in 2007 opened a mortgage bond with adjustable rate based on Euribor3, with security ID DK0002017078. This bond will also have an interest rate floor of 0% in the event of negative interest.

Bonds opened on 19 May 2015 and later
For new covered mortgage bonds with adjustable rates opened on 19 May 2015 or later, it is specified that no interest rate floor is applicable and that any negative interest will be charged to investors. In practice, this will be effected by means of offsetting or by the drawing of bonds for an amount equivalent to the negative interest. All security IDs, both existing open security IDs and security IDs opened after 19 May 2015, are still subject to the specific balance principle.

Borrowers and negative interest
Any negative interest on bond loans with adjustable rates and adjustable-rate mortgage loans will benefit borrowers by means of offsetting against the mortgage payment – see Nordea Kredit’s company announcement no 24 of 20 February 2015.

For new bond loans with adjustable rates Nordea Kredit may choose at a later stage that negative interest will benefit borrowers in the form of an additional principal payment on their loan.

For further information: Stephan Ghisler-Solvang, telephone +45 61 22 93 92.