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 their mortgage lending by issuing covered bonds. Consequently, covered bonds make up the vast majority of the 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 with Totalkredit. Totalkredit still has outstanding covered bonds, but has not issued new covered bonds since 2006. Read more about the joint funding model here.
Covered bonds are issued with many different maturities and structures. Most of the bonds are issued in DKK, but Nykredit also issues covered bonds denominated in EUR and SEK.
Nykredit Realkredit A/S is also the issuing entity when the Group issues other types of debt instruments, such as Additional Tier 1 (AT1) capital, Tier 2 capital, bail-inable senior debt and senior unsecured debt. Nykredit Realkredit A/S previously issued senior secured debt (junior covered bonds) but has not done so since 2014.
Nykredit Bank is the Group's deposit-taking entity, which undertakes all types of banking activities except covered bond funding of mortgage loans. The Bank funds its lending and investment banking activities by a mix of personal and business deposits, long-term intercompany funding provided by Nykredit Realkredit A/S and ECP issues. Nykredit Bank previously issued senior unsecured debt by way of Euro Medium Term Notes (EMTNs).