SCBC – Covered Bond Funding
SCBC's operations began in 2006 when the company received a licence from the Swedish Financial Supervisory Authority to issue covered bonds. In the same year, SCBC also became the first Swedish issuer of covered bonds.
SCBC does not engage in any new lending operations itself; instead it acquires loans from SBAB continuously or as required. The purpose of these acquisitions is that the loans, in full or in part, will be included in the cover pool that constitutes collateral for all investors in SCBC's covered bonds.
The loans that are not funded through the issuance of covered bonds are financed by a subordinated loan from the parent company, SBAB. The subordinated loan and SBAB's claims on SCBC under the outsourcing agreement are subordinated to all unsubordinated creditors in the event of SCBC's bankruptcy or liquidation. SCBC has thus minimised the risk of conflicts of interests between secured and non-secured creditors.
SCBC's business activities are mainly focused on issuing covered bonds in the Swedish and international capital market. For this purpose, the company uses the following funding programmes:
· Swedish Covered Benchmark Programme; No set limit
· Euro Medium Term Covered Note Programme (EMTCN); EUR 16 bn
SCBC - Covered Bond Funding