The Danish Financial Supervisory Authority has published questions and answers explaining how mortgage credit institutions and banks issuing special covered bonds may calculate the cash value of recognized encumbrances on real estate used as collateral for covered bond issuance. The guidance interprets the existing valuation requirement, which sets the calculation framework but does not prescribe a specific method. Institutions may use conversion price tables and outsource the calculation to an external provider, provided they comply with outsourcing rules. Multiple institutions may use the same provider individually or jointly. Responsibility for the valuation remains with each institution even when the calculation is outsourced.
Danish Financial Supervisory Authority clarifies cash value calculations for recognized property encumbrances
The Danish Financial Supervisory Authority has clarified how mortgage credit institutions and banks issuing special covered bonds may calculate the cash value of recognized property encumbrances. Institutions may use conversion price tables or outsource the calculation, but each institution remains responsible for the valuation.