Nykredit Group has two issuing entities: Nykredit Realkredit A/S and Nykredit Bank A/S.
Mortgage lending is carried out by Nykredit Realkredit and Totalkredit, which are both specialised mortgage banks. According to Danish legislation, mortgage banks are prohibited from taking deposits, issuing guarantees or performing financial services other than mortgage lending and are only permitted to fund its mortgage lending by issuing covered bonds. Consequently, covered bonds make up the vast majority of Nykredit Group’s funding.
Since 2006, all covered bond issuance for the Group has been carried out through Nykredit Realkredit via a joint funding model. Totalkredit has covered bonds outstanding, but has not issued new covered bonds since 2006.
Nykredit Realkredit A/S is also the issuing entity when the Group issues other types of debt instruments, such as Additional Tier 1 capital, Tier 2 capital, Senior Resolution Notes and Senior Secured Bonds.
Nykredit Bank is the Group’s deposit-taking entity and performs all kinds of banking business except mortgage lending funded by covered bonds. The bank funds its lending and investment banking activities by a mix of retail and wholesale deposits and various types of capital market funding.