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Covered Bonds

Danish covered bonds have a reputation as liquid, high-quality securities.

  • No Danish mortgage bank has ever defaulted on a covered bond. There is one example of late payment back in the 1930s, however.
  • Danish covered bonds are assigned good ratings by international credit rating agencies (investment grade).
  • In the open markets, covered bonds are priced and traded as very secure and liquid securities.
  • Danish covered bonds were in demand even after the collapse of Lehman Brothers in the autumn of 2008.
  • Issued covered bonds total nearly €375bn (end-2015). The amount exceeds Denmark's annual GDP of about €257bn by 45 per cent and is roughly four times higher than the sovereign debt of approx. €101bn. Mortgage lending represents two thirds of total lending by financial undertakings. The mortgage system is of decisive importance to the Danish economy and financial stability.

The Danish mortgage market is remarkably large compared to other countries. Even though Denmark is a small country, we have the second-largest bond market in Europe. The largest is Germany, which issues bonds worth approx. €402bn, followed by Denmark (€375bn), France (€326bn), Spain (€308bn), Sweden (€210bn) and the UK (€137bn). Together, these six countries account for 70 per cent of the total European market, according to data from 2015 provided by the European Covered Bond Council (ECBC).

The German mortgage market differs from the other five countries in that quite a substantial amount of the outstanding bonds are issued to fund public loans. In terms of bonds issued solely for the purpose of funding real property, Denmark has the second-largest mortgage market in Europe.


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Finance Denmark is an business association for banks, mortgage institutions, asset management, securities trading and investment funds in Denmark. Our members are mortgage institutions, banks, savings banks, cooperative savings banks, Danish branches of foreign banks, asset managers, Danish securities dealers and investment funds. 

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