Please click here for latest coverage of this topic – yesterday’s article was incorrectly included in today’s bulletin.

UPDATED: Denmark’s Sydbank and Jyske Bank said today (Tuesday) that they are working with BRFkredit on an agreement whereby they will finance home loans (prioritetslån) via covered bonds (SDOs) issued by BRFkredit.

“The agreement is the first to bring the provision of Danish covered bond legislation into play as regards non-consolidated institutions,” said Karen Frøsig, Sydbank group executive vice president.

The banks said that the agreement provides them with flexible and competitive access to long term funding of home loans granted by banks on market terms via BRFkredit’s triple-A covered bond issues. They said that the Danish FSA has given its approval to the principle of the joint funding model.

They said that the agreement will not affect existing cooperation in mortgage credit lending (involving realkreditlån) between Sydbank and Jyske Bank, respectively, and Nykredit/Totalkredit and DLR Kredit.