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Questions Slovenian Covered Bonds
I. STRUCTURE OF THE ISSUER
1. Who is the issuer?
  • Universal credit institution with a special license
2. Does the bondholder have recourse to the credit institution?
  • Yes, direct
(1) Comments: When holders of mortgage bonds do not receive payment in full during the separate bankruptcy proceedings, they shall be entitled to lodge a claim for the remaining part of their receivables from mortgage bonds in ordinary bankruptcy proceedings against the issuer within 30 days of the conclusion of the separate bankruptcy proceedings.
3. Who owns the cover assets?
  • The issuer directly
4. Is the issuer the originator of the assets?
  • Yes
  • No
(2) Comments: For the purpose of providing cover assets for issuing mortgage bonds and municipal bonds, the issuer may grant mortgage loans and loans to entities governed by public law
alone or may purchase them from other banks.
II. FRAMEWORK
1. Are the bonds governed by a special covered bond Legislation?
  • Yes
2. What is the legal framework for bankruptcy of the issuer of covered bonds?
  • General insolvency law
  • Specific legal framework superseding the general insolvency law
(3) Comments: Special provisons apply with respect to the cover assets.
III. COVER ASSETS
1. What types of assets may be included in cover pools?
  • Exposures to public sector entities
  • Mortgage loans (Mortgage loans for the purpose of this question are taken to include guaranteed real-estate loans.)
  • Exposures to credit institutions
(4) Comments: 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?
  • EEA
  • CH
3. What is the geographical scope for mortgage assets?
  • EEA
  • CH
4. Are regular covered bond specific disclosure requirements to the public mandatory?
  • Yes
(5) Comments: Disclosure in the Issuer's Annual Report.
IV. VALUATION OF THE MORTGAGE COVER POOL & LTV CRITERIA
1. LTV is calculated using which valuation?[4]
  • Market value
  • Mortgage lending value
  • Other
2. Are there any special LTV limits used solely for calculating collateralisation rates for the cover pool (if yes, specify)?
  • Residential      
  • Commercial      
(6) Comments: Residential and Commercial mortgage loans are the only loans that can be included in the cover pool of the mortgage covered bond.
3. Do bondholders get the benefit of that portion of the loan which exceeds the LTV cap?
  • Yes
4a. Is there an LTV cap which makes the entire loan ineligible to be put in the cover pool (if yes, specify)?
  • No
4b. Is there an LTV cap which would require a loan to be removed from the cover pool?
  • No
5. Is there any additional LTV limit on a portfolio basis?
  • No
V. ASSET-LIABILITY GUIDELINES
. 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
  • Present value cover
(7) Comments: In addition to the two above mentioned tests also Interest Cover Test is applied.
5. What is the frequency of coverage calculations?
  • Daily
  • Monthly
6. What types of stress scenarios are applied?
  • Static
  • Dynamic
  • Model based (i.e. VaR)
(8) Comments: Issuer to choose one of the above options.
7. What is the frequency of stress test calculations?
  • Monthly
. Exposure to liquidity risk
8. Is exposure to liquidity risk required to be mitigated by law or contract?
  • Yes
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?
  • No
12. What is the consequence of not fixing a breach of liquidity risk mitigants?
  • Other regulatory or rule-based action
. Monitoring of exposures to market and liquidity risk
13. Who monitors the maintenance of coverage tests?
  • 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?
  • By legislation/regulation
16. What is the level of minimum mandatory overcollateralisation?

  • 2%
17. If mandatory overcollateralisation is required, are the amounts above the minimum OC level protected?
  • Yes
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?
  • Other regulatory or rule-based actions
VI. COVER POOL MONITOR & BANKING SUPERVISION
1. Is a special license required for the issuing of covered bonds?
  • Yes with additional requirements compared to general banking supervision regulations
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
  • Reporting on demand for special occasions
3. What is the role of the banking supervision regarding covered bonds?
  • To check whether eligibility criteria are fulfilled and documented
  • Checking quality of cover assets (real estate valuations, etc)
  • Monitoring of exposure to market risk and liquidity risk
  • Evaluation of operational risk
  • To check minimum mandatory overcollateralisation requirements
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
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
VII. SEGREGATION OF ASSETS & BANKRUPTCY REMOTENESS OF COVERED BONDS
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
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?
  • Yes
6. If derivatives are permitted in the cover pool, what is their ranking?
  • Pari passu to covered bond holders
VIII. RISK WEIGHTING & COMPLIANCE WITH EUROPEAN LEGISLATION
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?
  • Yes
4. Are there any special investment regulations regarding covered bonds?
IX. ADDITIONAL INFORMATION
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
 

Comments for your selection

  • 1: When holders of mortgage bonds do not receive payment in full during the separate bankruptcy proceedings, they shall be entitled to lodge a claim for the remaining part of their receivables from mortgage bonds in ordinary bankruptcy proceedings against the issuer within 30 days of the conclusion of the separate bankruptcy proceedings.
  • 2: For the purpose of providing cover assets for issuing mortgage bonds and municipal bonds, the issuer may grant mortgage loans and loans to entities governed by public law alone or may purchase them from other banks.
  • 3: Special provisons apply with respect to the cover assets.
  • 4: Mortgage loans for the purpose of this question are taken to include guaranteed real-estate loans.
  • 5: Disclosure in the Issuer's Annual Report.
  • 6: Residential and Commercial mortgage loans are the only loans that can be included in the cover pool of the mortgage covered bond.
  • 7: In addition to the two above mentioned tests also Interest Cover Test is applied.
  • 8: Issuer to choose one of the above options.