Obligatiuni Ipotecare - Mortgage Covered Bonds

1 Who is the issuer?
  • Universal credit institution
  • Specialized credit institution
2 Does the bondholder have recourse to the credit institution?
  • Yes, indirect
3 Who owns the cover assets?
  • The issuer directly
4 Is the issuer the originator of the assets?
  • Yes
1 Are the bonds governed by a special covered bond Legislation?
  • Yes
  Comments: The Romanian mortgage covered bonds are governed by the Law no. 32/2006 and additional regulations issued by the supervisory authorities. Up to date there is no issue of covered bonds under this legislative framework. The Law no. 32/2006 and the secondary legislation are under review for amendments.
2 What is the legal framework for bankruptcy of the issuer of covered bonds?
  • Specific legal framework superseding the general insolvency law
1 What types of assets may be included in cover pools?
  • Mortgage loans (Mortgage loans for the purpose of this question are taken to include guaranteed real-estate loans.)
2 What is the geographical scope for public sector assets?
3 What is the geographical scope for mortgage assets?
  • Domestic
  • EEA
4 Are regular covered bond specific disclosure requirements to the public mandatory?
  • Yes
1 LTV is calculated using which valuation?[4]
  • Market value
2 Are there any special LTV limits used solely for calculating collateralisation rates for the cover pool (if yes, specify)?
  Comments: In the amended Law it will be introduced a relative lending limit of 60% from the value of the mortgaged property.
3 Do bondholders get the benefit of that portion of the loan which exceeds the LTV cap?
  • No
4a Is there an LTV cap which makes the entire loan ineligible to be put in the cover pool (if yes, specify)?
  • Residential      
  • Commercial      
  Comments: Residential: 80%
Commercial: 70%
Under review for amendments.
4b Is there an LTV cap which would require a loan to be removed from the cover pool?
  • Residential      
  • Commercial      
5 Is there any additional LTV limit on a portfolio basis?
  • No
Exposure to market risk
1 Is exposure to market risk (e.g. interest rate, currency risks) required to be mitigated by law or contract?
  • Yes
2 What is the primary method for the mitigation of market risk?
  • “Natural” matching (matching without the use of off-balance sheet instruments) and stress testing
3 If the answer to the above question on market risk mitigation is “Use of derivative hedge instruments”, please specify whether those instruments are entered into:
  • Not relevant
4 What type of coverage test is applied?
  • Nominal cover
5 What is the frequency of coverage calculations?
  • Daily
  Comments: It will be clarified in the amended legislation.
6 What types of stress scenarios are applied?
  • Static
  Comments: It will be clarified in the amended legislation.
7 What is the frequency of stress test calculations?
  • Not relevant
  Comments: It will be clarified in the amended legislation.
Exposure to liquidity risk
8 Is exposure to liquidity risk required to be mitigated by law or contract?
9 What is the primary method for the mitigation of liquidity risk on interest payments?
  • “Natural” matching (matching without the use of off-balance sheet instruments) and stress testing (Natural matching is taken to include replacing CBs with new issues, as well as substitute assets.)
10 What is the primary method for the mitigation of liquidity risk on principal payments?
  • Natural matching (matching without the use of off-balance sheet instruments) and stress testing
11 Is there any grace period in case of a breach of liquidity risk mitigants?
  • Lenght of period
    30 days
12 What is the consequence of not fixing a breach of liquidity risk mitigants?
  • Programme freeze (neither sale of assets nor new issuance allowed)
Monitoring of exposures to market and liquidity risk
13 Who monitors the maintenance of coverage tests?
  • Supervisory authority
  • Trustee/cover pool monitor
14 Are there any regular public reporting requirements for market and liquidity risk?
  • No
Overcollateralisation
15 Is mandatory minimum overcollateralisation required?
16 What is the level of minimum mandatory overcollateralisation?
  Comments: In the amended legislation will be introduced a level of minimum overcollateralisation.
17 If mandatory overcollateralisation is required, are the amounts above the minimum OC level protected?
  • No
18 Is there any grace period in case of a breach of the coverage test?
  • No
19 What is the consequence of not fixing a breach of the coverage test?
  • Programme freeze (neither sale of assets nor new issuance allowed)
  • Alternative administration
1 Is a special license required for the issuing of covered bonds?
  • No
2 Are there special reporting duties of the covered bond issuer to the supervision authority concerning covered bonds and the cover pool, which go beyond the regular banking supervision?
  • Periodic reporting required
3 What is the role of the banking supervision regarding covered bonds?
  • To check whether eligibility criteria are fulfilled and documented
  • Evaluation of operational risk
4 Is there a special role of banking supervision in crisis regarding covered bonds?
  • Safeguarding ongoing management of the cover pool directly or via a special administrator
  • Involvement in transfer of cover assets and covered bonds to another credit institution
5 Is there a cover pool monitor independent from the issuer?
  • Yes
6 If there is an independent cover pool monitor, what are its duties?
  • Performing audits of the cover pool
  • Reporting duties to the supervision authority
  • Verification of coverage tests
1 Do covered bonds automatically accelerate when the credit institution goes insolvent?
  • No
2 What is the cover pool?
  • All assets on the cover register
3 How are the covered bondholders protected against claims from other creditors in case of insolvency of the issuer?
  • Preferential claim by law
  • Specific cover pool administration
4 Is there recourse to the credit institution’s insolvency estate upon a cover pool default?
  • Yes, pari passu with unsecured creditors
5 Are there provisions that require derivatives to continue in case of insolvency of the credit institution?
  • No
6 If derivatives are permitted in the cover pool, what is their ranking?
1 Does the covered bond fulfil the criteria of UCITS 52(4)?
  • Yes
2 For further information regarding the compliance to the criteria of Article 129 of the Capital Requirements Regulation (CRR), please see the following links: http://ecbc.hypo.org/Content/default.asp?PageID=504#position https://www.coveredbondlabel.com
3 Are listed covered bonds eligible in repo transactions with the national central bank?
4 Are there any special investment regulations regarding covered bonds?
  • No
1 Link to National Association representing covered bond interests
  • Association
2 Link to national regulators and supervisors
  • List
3 Fact Book Country Chapter
  • Chapter


 
4 Hypostat Country Chapter
  • Chapter