Select Framework(s)
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- Australia
- Australian Covered Bonds
- Austria
- FBS - Fundierte Bankschuldverschreibungen
- Pfandbriefe
- Belgium
- Belgium Covered Bonds
- Brazil
- Brazil Covered Bonds
- Bulgaria
- Bulgarian Covered Bonds
- Canada
- Canadian Covered Bonds
- Chile
- Bonos Hipotecarios (BH) - Chilean Covered Bonds
- Cyprus
- Cypriot Covered Bonds
- Czech Republic
- Czech Republic Covered Bonds
- Denmark
- Realkreditobligationer - RO
- Særligt Dækkede Obligationer - SDO
- Særligt Dækkede Realkreditobligationer - SDRO
- Estonia
- Estionian Covered Bonds
- Finland
- Finnish Covered Bonds
- France
- Caisse de Refinancement de l'Habitat - CRH
- General Law Based CBs
- Obligations Foncières - OF
- Obligations à l'Habitat - OH
- Germany
- Pfandbriefe
- Greece
- Greek Covered Bonds
- Hungary
- Hungarian Covered Bonds
- Iceland
- Icelandic Covered Bonds
- Ireland
- Asset Covered Securities - ACS
- Italy
- Obbligazioni Bancarie Garantite - OBG
- Luxembourg
- Lettres de Gage hypothécaires
- Lettres de Gage mobilières
- Lettres de Gage mutuelles
- Lettres de Gage publiques
- Netherlands
- Dutch registered CBs programmes
- New Zealand
- New Zealand Covered Bonds
- Norway
- Norwegian Covered Bonds
- Poland
- Polish Covered Bonds
- Portugal
- Mortgage CB (Obrigações Hipotecárias)
- Public Sector CB (Obrigações sobre o Sector Público)
- Romania
- Obligatiuni Ipotecare - Mortgage Covered Bonds
- Russia
- Mortgage Obligations
- Singapore
- Singapore Covered Bonds
- Slovakia
- Slovakian Covered Bonds
- Slovenia
- Slovenian Covered Bonds
- South Korea
- South Korean Covered Bonds
- Spain
- Cédulas Hipotecarias - CH
- Sweden
- Swedish Covered Bonds
- Switzerland
- Swiss Pfandbriefe
- Contractual Covered Bonds
- Credit Suisse CB
- UBS CB
- Valiant
- Turkey
- Turkish Covered Bonds
- United Kingdom
- Regulated Covered Bonds - RCB
- Unregulated Covered Bonds
- United States
- US Covered Bonds
Select Chapter(s)
- I. STRUCTURE OF THE ISSUER
- II. FRAMEWORK
- III. COVER ASSETS
- IV. VALUATION OF THE MORTGAGE COVER POOL & LTV CRITERIA
- V. ASSET-LIABILITY GUIDELINES
- VI. COVER POOL MONITOR & BANKING SUPERVISION
- VII. SEGREGATION OF ASSETS & BANKRUPTCY REMOTENESS OF COVERED BONDS
- VIII. RISK WEIGHTING & COMPLIANCE WITH EUROPEAN LEGISLATION
- IX. ADDITIONAL INFORMATION
Questions | Cédulas Hipotecarias - CH |
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I. STRUCTURE OF THE ISSUER | |
1. Who is the issuer? |
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2. Does the bondholder have recourse to the credit institution? |
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3. Who owns the cover assets? |
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4. Is the issuer the originator of the assets? |
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II. FRAMEWORK | |
1. Are the bonds governed by a special covered bond Legislation? |
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2. What is the legal framework for bankruptcy of the issuer of covered bonds? |
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(1) Comments: The specific legal framework defined in the Law 2/81 that regulates the mortgage market complements the general insolvency law. | |
III. COVER ASSETS | |
1. What types of assets may be included in cover pools? |
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(2) Comments: According to the national law, the cédulas hipotecarias can be backed up to a limit of 5 percent of the issued capital by the substitution assets that, among the differ options described above, may include: Exposures to public sector entities, Exposures to credit institutions, Group originated Senior MBS and Senior MBS issued by third parties. | |
2. What is the geographical scope for public sector assets? |
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(3) Comments: In the case of cédulas hipotecarias the scope is the EU | |
3. What is the geographical scope for mortgage assets? |
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(4) Comments: In the case of cédulas hipotecarias the scope is the EU | |
4. Are regular covered bond specific disclosure requirements to the public mandatory? |
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IV. VALUATION OF THE MORTGAGE COVER POOL & LTV CRITERIA | |
1. LTV is calculated using which valuation?[4] |
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2. Are there any special LTV limits used solely for calculating collateralisation rates for the cover pool (if yes, specify)? |
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(5)
Comments: LTV limits in the Spanish legislation do not apply to the cover pool (which is comprised by the entire issuer’s mortgage portfolio) but to issuance limits. Credit institutions shall not issue Cédulas Hipotecarias for an amount greater than 80 per 100 of the outstanding eligible mortgage loans and credits in their portfolios, which have to fulfil the following LTV requirements: 60 per 100 LTV in the general case and 80 per 100 for residential loans. |
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3. Do bondholders get the benefit of that portion of the loan which exceeds the LTV cap? |
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4a. Is there an LTV cap which makes the entire loan ineligible to be put in the cover pool (if yes, specify)? |
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(6) Comments: See Comment on IV.2. However, the LTV caps for eligible loans affect the entire loan, i.e. no part of a loan above the LTV cap is eligible. | |
4b. Is there an LTV cap which would require a loan to be removed from the cover pool? |
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(7) Comments: See Comment on IV.2 and IV.4a | |
5. Is there any additional LTV limit on a portfolio basis? |
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(8) Comments: See Comment on IV.2 | |
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? |
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(9) Comments: The majority of mortgage loans in Spain are floating and Issuers issue mainly fixed rate bonds. As a result of that Spanish issuers hedge theses issues. This is a common practice. | |
2. What is the primary method for the mitigation of market risk? |
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(10) Comments: When the issuance is at a variable rate, then the method used will be “natural matching” | |
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: |
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4. What type of coverage test is applied? |
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5. What is the frequency of coverage calculations? |
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6. What types of stress scenarios are applied? |
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7. What is the frequency of stress test calculations? |
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. Exposure to liquidity risk | |
8. Is exposure to liquidity risk required to be mitigated by law or contract? |
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(11) Comments: The mitigation to the exposure to liquidity risk comes from the high level of over-collateralization that is required (by law) and also by the substitution assets serving as collateral of the issue. | |
9. What is the primary method for the mitigation of liquidity risk on interest payments? |
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(12) Comments: See question V.8 | |
10. What is the primary method for the mitigation of liquidity risk on principal payments? |
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(13) Comments: See question V.8 | |
11. Is there any grace period in case of a breach of liquidity risk mitigants? |
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12. What is the consequence of not fixing a breach of liquidity risk mitigants? | |
(14) Comments: Not applicable | |
. Monitoring of exposures to market and liquidity risk | |
13. Who monitors the maintenance of coverage tests? |
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14. Are there any regular public reporting requirements for market and liquidity risk? |
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. Overcollateralisation | |
15. Is mandatory minimum overcollateralisation required? |
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16. What is the level of minimum mandatory overcollateralisation? |
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(15)
Comments: The minimum level is 25%. This level would take place if the following two conditions are fulfilled: • The entire mortgage portfolio of the issuer is eligible (see LTV limits in item IV.2). • The Issuance level amounts to 80% of mortgage portfolio. |
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17. If mandatory overcollateralisation is required, are the amounts above the minimum OC level protected? |
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18. Is there any grace period in case of a breach of the coverage test? |
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19. What is the consequence of not fixing a breach of the coverage test? |
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VI. COVER POOL MONITOR & BANKING SUPERVISION | |
1. Is a special license required for the issuing of covered bonds? |
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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? |
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3. What is the role of the banking supervision regarding covered bonds? |
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4. Is there a special role of banking supervision in crisis regarding covered bonds? |
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5. Is there a cover pool monitor independent from the issuer? |
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(16) Comments: No, but it is foreseen to be included in the future regulations. | |
6. If there is an independent cover pool monitor, what are its duties? | |
VII. SEGREGATION OF ASSETS & BANKRUPTCY REMOTENESS OF COVERED BONDS | |
1. Do covered bonds automatically accelerate when the credit institution goes insolvent? |
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2. What is the cover pool? |
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3. How are the covered bondholders protected against claims from other creditors in case of insolvency of the issuer? |
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4. Is there recourse to the credit institution’s insolvency estate upon a cover pool default? |
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5. Are there provisions that require derivatives to continue in case of insolvency of the credit institution? |
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6. If derivatives are permitted in the cover pool, what is their ranking? |
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(17) Comments: Covered bonds holder have preference over the issuer’s insolvency state. | |
VIII. RISK WEIGHTING & COMPLIANCE WITH EUROPEAN LEGISLATION | |
1. Does the covered bond fulfil the criteria of UCITS 52(4)? |
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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? |
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4. Are there any special investment regulations regarding covered bonds? |
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IX. ADDITIONAL INFORMATION | |
1. Link to National Association representing covered bond interests | |
2. Link to national regulators and supervisors |
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3. Fact Book Country Chapter |
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4. Hypostat Country Chapter |
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