Nykredit Realkredit and Totalkredit are both specialised mortgage banks regulated by Danish covered bond legislation. This means that the two entities are only allowed to lend against mortgage security over real property and that all mortgage lending must be funded by issuance of covered bonds.

Covered bond regulation

Denmark introduced the first covered bond legislation in the mid-19th century. Mortgage banks are highly regulated credit institutions and are required to fund all mortgage lending by issuance of covered bonds.

The purpose of EU and Danish covered bond legislation is to ensure that covered bonds are bonds with low risk for investors. 

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Legislation and security

Nykredit covered bonds comply with UCITS regulation for covered bonds.

The majority of covered bonds issued by Nykredit after 1 January 2008 also comply with the covered bond criterias of the CRD/CRR.

Danish legislation was last amended in the summer of 2007, in part to ensure the continuous eligibility of Danish mortgage bonds as covered bonds under the stricter CRD definition.

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Nykredit's need for capital flexibility

Read the paper explaining Nykredit’s need for capital flexibility and the implications for the company’s capital policy.
The paper was presented at a meeting of Nykredit’s Board of Representatives on 23 November 2017, where the sale of a stake in Nykredit A/S to a group of pension funds was approved.


Joint funding

Nykredit Group includes two separate mortgage banks that are both licensed to issue covered bonds. In order to facilitate a more efficient funding of the Group’s mortgage lending the Group is employing a joint funding model under which mortgage loans from Totalkredit are funded by issuance of covered bonds from the parent company Nykredit Realkredit.

The joint funding model is approved by the Danish FSA.

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Danish FSA inspection reports

Read the Danish Financial Supervisory Authority’s inspection reports for the Nykredit Group here:

The reports are only available in Danish.

View reports