Base Prospectus and Final Bond Terms

DLR Kredit issues covered bonds (SDO) to fund its mortgage lending activities. In addition, DLR issues different types of senior debt for the purpose of loan-to-value fulfilment, compliance with OC requirements including for rating purposes, and to cover the debt buffer requirement for mortgage banks.

Subject to DLR’s general base prospectus, DLR may issue covered bonds (SDO), mortgage bonds (RO), Senior Secured Bonds (SSB) and senior unsecured debt.

Since 2008, DLR has solely issued SDOs to fund its mortgage lending. DLR ceased to use ROs as a funding source in early 2008 when DLR switched to SDO funding from the new Capital Centre B. DLR’s ROs were issued out of the General Capital Centre, and in connection to the transition to SDO funding the ROs were grandfathered in order to uphold the same preferential risk weight as the SDOs.

Subject to section 15 in the Danish Mortgage Credit Loans and Mortgage Credit Bonds, etc. Act DLR may issue senior secured bonds to fulfill the supplementary security requirement for issued SDOs, and to increase the surplus cover in the pool, including out of rating considerations. Since 2012, DLR has issued SSBs from Capital Centre B.

In addition, DLR may issue unsecured senior debt for general business-related purposes, including compliance with the debt buffer requirement. Senior debt issued to fund the debt buffer requirement must be issued out of the General Capital Centre.

Since 2017 DLR has fulfilled the debt buffer requirement by issuing subordinated senior debt, at first in the form of Senior Resolution Notes (SRN) and from 2018, in response to new regulation on creditor hierarchy coming into force on 1 July 2018, in the form of Senior Non-Preferred Notes (SNP). Subordinated senior debt is issued under separate prospectuses.