- Legal basis
- Mortgage Bank Act of 1899 in its current version
- Asset cover / Cover pool
- Loans secured by liens recorded in the
- Ear-marking of the mortgage with “surety
registry” in the land register (if the property is in
Deeds for disposal of liens provided with this ear-marking
must be (co-)endorsed by the Pfandbrief trustee (see under
- The property must be located in Austria,
an EU or EEA member state or in Switzerland. If the property
is located outside of Austria, it must be ensured that
the rights of the Pfandbrief creditor can be enforced
analogously to the legal conditions in Austria (in particular
regarding the priority rights in case of bankruptcy).
- Derivative contracts (to reduce interest
rate, foreign exchange or debt risks, cf. sec 6 (5) HypBG).
- Exposure limit of 60% of the calculated collateralisation
value. When establishing that value, in particular, only the
persistent attributes and the persistent revenue from the
property are taken into account (sec 12 HypBG). Any prior
charges on the collateralisation value must first be subtracted.
Mandatory nominal OC of min.
2% which must be held in substitute cover assets.
- In addition to disclosing the nominal cover,
the articles of association of the issuerof the mortgage Pfandbrief
may also provide for disclosure of net present value cover.
- collateral of 15% of outstanding Pfandbriefe (cf. sec 6
- Debt of any of the domestic corporations of public
law, states, regional governments and local communities identified
in sec 41 (1) HypBG
- Balances held with certain central banks or
at specific financial institutions
- Compensation of investors
- A mortgage bank is liable with all of its assets
- In the event of the mortgage bank’s insolvency,
the asset cover constitutes a segregated asset estate on which
Pfandbrief creditors hold a first-ranking claim
- Matching maturity
- According to sec 9 HypBG mortgage Pfandbriefe
may only be issued if their maturity does not significantly
exceed the maturity of the mortgage loans.
- Set-off rights
- Any set-off against claims in the asset cover
is statutorily barred (sec 34a HypBG).
- The credit or loan borrower must be informed
- Monitoring & Supervision
- Cover pool trustee (appointed by the Austrian Finance Ministry)
- monitors compliance with cover pool regulations
and confirms it prior to any new issue
- must consent to any additions to or withdrawals
from the cover pool
- Financial Market Authority
- Public accountants and bank auditors
- Article 22 (4) of UCITS or Capital Requirements Directive (CRD)
- Risk weighting: 10%