Securities


Debt Securities of Austrian Issuers – Covered Bonds

Table    Publication schedule

Notes:

 

Pfandbriefe and covered bonds are debentures issued under a special legal framework and securitised by their own cover pool.

  • In Austria, they are provided with the following statutory security features that offer investors a high degree of protection and transparency:

    • Separate legislative basis for Pfandbriefe and covered bonds
      • Mortgage Bank Act (Hypothekenbankengesetz, HypBG) since 1899 and 1938
      • Pfandbrief Act (Pfandbriefgesetz, PfandbriefG) since 1927 and 1938
      • 1905 Act on Covered Bond Issuance (Gesetz von 1905 betreffend fundierte Bankschuldverschreibungen, FBschVG)
    • The bond issuers maintain their own cover pool to securitise the Pfandbrief or the covered bond on their balance sheets

      • Eligible claims for the cover pool are mortgage claims or local community claims
      • In the event of insolvency the cover pool is administered separately from the issuer’s remaining assets and serves first of all to service the claims of Pfandbrief and covered bond creditors
      • For claims going beyond the asset cover, the issuer is additionally liable with all its assets (on an equal footing with non-securitised creditors)
      • Minimum surplus cover of the asset cover is stipulated by law
      • Regular review of the cover pool by government-appointed trustees or government commissioners
    • The issuers have a banking licence and are subject to the Austrian banking regulator

      Austrian Pfandbriefe and covered bonds meet the requirements of article 22 (4) of the UCITS Directive (85/611/EEC) and are eligible for investment of trust moneys by virtue of the provisions of the Trustee Act 1925 (as amended by the Trustee Investment Act 1961).

  • Austrian Pfandbriefe and covered bonds look back on a first-rate credit history: since the legislative basis came into force, there has never been a default.

  • They are an essential source of refinancing for banks and an interesting investment for investors, combining return on investment and security. Their importance for financial markets, in particular in a financial crisis, was underscored by the EUR 60 billion covered bond buy-up programme introduced by the ECB in 2009.

Classification of  underlying takes place due to the data field ’Garantie-/Deckungskennzeichen’.

Source:

OeNB.

Legal basis:

Article 44 Nationalbank Act, ECB guideline.

Methodology:

Monthly census.

Reporting institutions:

Banks, Austrian Federal Financing Agency, mortgage bond division.
Securities identification information is derived from the securities database of the OeNB’s Section Statistics.

Keywords:

Issuance statistics, debt security, securities issues, gross issues, net issues, redemptions