Pfandbriefforum

Emittenten
 

 Development of the Pfandbrief
 Mortgage Pfandbriefe
 Public (municipal) Pfandbriefe
 Covered bonds


Basic Information

» Covered bonds

  • Covered bonds may be issued by all Austrian banks, if their corporate charters make provision for doing so, on the basis of the “1905 Act on Covered Bond Issuance,” abbreviated as FBSchVG.


  • They are securitised by a cover pool. Suitable as a cover estate (“surety”) are:
    • Loans and securities securitised by a lien in the land register
    • Claims and securities eligible for investment of trust money
    • Claims on or securities issued by a corporation of public law, a provincial government or a local community of a member state of the EEA or Switzerland (if the public authorities with jurisdiction under article 43 (1) (b) (5) of Directive 2000/12/EC allocate it a weighting of maximum 20%) or if the guarantee is assumed by any of those corporations
    • Hedging transactions to avoid the danger of future interest rate, foreign exchange or debtor risks and, to a limited extent, substitute coverage
  • Substitute cover in the amount of 15% of the cover pool is admissible in the form of deposits with the central banks of Zone A or with financial institutions in accordance with section 2 (20) of the Banking Act (BWG) or in cash.

  • The cover estate is recorded by the issuer in a cover register. In addition, with mortgage-backed claims allocation of the claim to the cover register is indicated in the “surety registry” (by means of a “Kautionsband”) of the land register.

  • Proper cover is regularly audited for the government commissioner by an administrator appointed by the Austrian Financial Market Authority.

  • The total amount of the covered bonds circulating, the interest as well as the administration costs that would presumably be incurred in case of bankruptcy must be covered by the cover estate at all times. Cash value cover with surplus cover of at least 2% can be provided for in the bank’s corporate statutes.

  • The borrower must be notified in advance of any inclusion of claims in the cover register. With its consent for inclusion in the cover register, the borrower waives the right to set the claim off against deposits held with the bank.

  • In the event of the issuer’s bankruptcy, the cover estate constitutes a segregated estate to satisfy claims from covered bonds and derivative agreements.

  • Covered bonds meet the requirements of article 22 (4) of the UCITS Directive (85/611/EEC) and are eligible for investment of trust money under section 230 b of Austria’s General Civil Code.