Bond Data Technical Standards

Nykredit and all other Danish covered bond issuers are introducing a new, simplified model to handle redemptions of callable bonds with annuity cash flows. Nykredit has issued callable bonds denominated in DKK and EUR. The new model is based on the EU Corporate Actions standards and the fact that securities must comply with the EU Corporate Actions standards to be compatible with the coming pan-European settlement platform, TARGET2 – Securities (T2S).

Frequently asked questions

You will not be able to see the redeemed amount until the redemption day. The redeemed amount will depend on the amount of new issues in the period and on the number of borrowers opting to prepay their loans in the same period.

You will be able to see the redeemed amount on the day before the due date. You will be able to see the expected redemption rate already on the day previously referred to as the publication date, which is at least six weeks before the due date. However, the expected redemption rate may vary until the day before the due date when the final redemption rate is fixed.

This information will appear from Nasdaq Copenhagen's information feed. 

There will be no changes from current practice. The redeemed amount will appear from information forwarded by your bank.

Yes, you can sell your bonds up until the day before the due date. The concept of "drawings" no longer exists.

Bond redemption will always affect bond prices, regardless of the redemption model used. As redemption is moved to the day before the due date, this "normal" price change will not be reflected in bond prices until the first day that the bonds are trading ex redemption.

Today, redeemed bonds are "marked" as redeemed in your custody account. That will not be the case going forward, as the bonds will not be redeemed until the due date. The concept of "drawings" no longer exists.

The model is introduced as part of EU harmonisation. The purpose is to ensure simpler settlement of securities trading within the EU.

Your bond holding will be reduced on the due date.

You will be able to see the expected redemption rate already on the day previously referred to as the publication date, which is at least six weeks before the due date. However, the expected redemption rate may vary until the day before the due date when the final redemption rate is fixed.

 

This information will be available on Nasdaq's website. 

The new model will not change the total amounts paid to investors. Like today, they will depend on the final redeemed amounts. Previously, the redeemed amount was final for investors on the publication date; from now on, they will be final on the due date.

You can read more about the new model here