Circular 3/2008

Temporary changes in the guidelines for pledging securities as collateral for loans in Norges Bank

[NOT IN FORCE]

The terms for pledging securities as collateral for loans in Norges Bank are laid down by Norges Bank pursuant to Section 3 of the Regulation on banks’ access to loans and deposits in Norges Bank etc. (Regulation no. 473 of 25 April 2001).

The current guidelines for pledging securities as collateral are set out in Circular no. 5/2 October 2007. The following temporary changes to the guidelines will apply as from 6 October 2008: 

Covered bonds etc.
The requirements regarding credit rating and listing on a stock exchange are waived for covered bonds issued pursuant to the provisions of the Financial Institutions Act, Chapter 2, IV, cf. section 3 in the guidelines of 2 October 2007.

These requirements are also waived for covered bonds issued by other countries if:

  • the cover asset pool comprises claims as stated in the first paragraph of Section 2-28 of the Financial Institutions Act and
  • loans as specified in Section 2-28, first paragraph, a-c of the Act are secured on assets located in Norway.

In connection with applications for collateralisation of covered bonds issued by other countries, Norges Bank may require the submission of a prospectus in English and a legal report documenting the bondholder’s rights to the cover asset pool etc.

A plan for obtaining a credit rating shall be attached to the application for collateralisation of the above bonds.  

Calculating the loan value of bonds
For bonds registered in the Norwegian Central Securities Depository where market values are not available, Norges Bank uses information from Stamdata in order to calculate market value.

For bonds registered in foreign securities depositories where credit ratings are not available, a synthetic price must be available from Interactive Data for the bond to be eligible as collateral.

When determining loan values, the calculated value will be given a haircut according to rates specified in section 4 of Circular no. 5/2 October 2007. For bonds without a credit rating or which are not listed, the highest set of haircut rates will be applied.

Published 6 October 2008 10:00
Edited 28 December 2010 14:02