Denmark’s Arbejdernes Landsbank is planning to join Sydbank and Jyske Bank in financing home loans (prioritetslån) via covered bonds (SDOs) issued by BRFkredit, it announced yesterday (Tuesday) afternoon.

The Danish bank is trying to get approval from the Danish FSA, an official at Arbejdernes Landsbank told The Covered Bond Report, adding that it may be a slow process.

An agreement with BRFkredit will allow Sydbank and Jyske Bank to continue financing traditional mortgage loans (realkreditlån) through SDROs issued by Nykredit/Totalkredit and DLR Kredit, while refinancing home loans through SDOs issued by BRFkredit.

“Together with the banks we have identified a funding model that creates value for both parties,” said Sven A. Blomberg, chief executive at BRFkredit. “The banks get access to BRFkredit’s competitive funding and BRFkredit gets paid for offering the banks an efficient funding model as a mortgage credit institution issuing covered bonds.”