Nordic Credit Rating's (NCR's) 'A' issuer rating and 'AAA' covered bond ratings on Danske Hypotek AB (publ) are unchanged following the publication of its mid-year 2021 results and receipt of updated cover pool details. Today NCR published its bi-annual statistical summary of Danske Hypotek's cover pool, revealing trends in the characteristics of the cover pool assets and associated loans.
Danske Hypotek's reported customer default probabilities improved in the second quarter, and contributed to reduced expected loss levels. In addition, increases in Swedish housing prices over the last few quarters have reduced the pool's average loan-to-value and contributed to a decline in NCR-stressed one-year and multi-year credit losses.
In June, Danske Hypotek issued its sixth covered bond and reached a milestone when it surpassed SEK 100bn in outstanding covered bonds. This is an important threshold in the mandates of institutional investors and puts Danske Hypotek on a more equal footing with larger Swedish covered bond issuers. As of June 30, the company's total outstanding covered bonds stood at SEK 104.9bn, compared with eligible mortgage loans of SEK 115.8bn.
This commentary does not constitute a rating action.
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