Nordic Credit Rating (NCR) said today that it had affirmed its 'A' long-term issuer rating on Sweden-based Danske Hypotek AB (publ). The outlook is stable. At the same time, NCR affirmed the 'N2' short-term rating, the 'AAA' issue rating on Danske Hypotek's covered bonds and the 'A+' issue rating on its senior unsecured bonds.
Rating rationale
Our 'A' issuer rating on Danske Hypotek reflects our current 'a' credit assessment of Danske Bank and the company's role as a 'vital' entity within the group structure. Our 'a' standalone assessment of Danske Hypotek is in line with our issuer rating. The outlook on our issuer rating on Danske Hypotek is stable, reflecting our credit assessment of Danske Bank.
Given the stable outlook on our issuer rating on Danske Hypotek, we expect the covered bond ratings to remain stable. This reflects our view that Danske Hypotek and Danske Bank would maintain their status as systemically important financial institutions with a very high likelihood of resolution in the event of failure, which would exclude the bail-in of covered bonds.
Stable outlook
The outlook is stable, reflecting our credit assessment of Danske Bank. Upside to the issuer rating on Danske Hypotek remains constrained by our 'a' credit assessment of Danske Bank. Given our view of Danske Hypotek as 'vital' to Danske Bank, we could revise our rating on the company due to changes in our credit assessment of the parent, which we currently regard as stable.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | A | A |
| Outlook: | Stable | Stable |
| Short-term issuer credit rating: | N2 | N2 |
| Covered bond issue rating: | AAA | AAA |
| Senior unsecured issue rating: | A+ | A+ |
Contacts:
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
Ylva Forsberg, analyst, +46768806742, ylva.forsberg@nordiccreditrating.com
The methodology documents used for this rating are NCR's Financial Institutions Rating Methodology published on 18 Feb. 2022, NCR's Rating Principles published on 24 May 2022, NCR's Group and Government Support Rating Methodology published on 18 Feb. 2022 and NCR's Covered Bond Rating Methodology published on 5 Jul. 2019. For the full regulatory disclaimer please see the rating report.