This page updated regularly deals with securitization developments in Denmark. If you have any news or development to contribute to this, please write to me.
Also see here:
For a write-up on the mortgage-securitization market in Denmark, see the following article.
The birthplace of securitisation:
It is said that mortgage markets in Denmark have existed for last 200 years, and therefore, Denmark is the real birthplace of securitisation. [See also Securitisation in Europe]. The structure of Danish mortgage market is much similar to the present concept of US mortgage pass throughs.
Present state of the market:
The amount of outstanding Danish fixed-rate MBSs was DKr 970 billion at the end of second quarter 1998, or about $150 billion, a remarkable amount for a nation of only five million people. Danish mortgage pools (or series) tend to be large in size, typically $1billion or more initially (some issues are more than $10 billion). This size is achieved by keeping a series open for up to three years; that is, new loans can be put into the pool anytime during a period of three years.
A report states that the Danish mortgage market has been booming, with a 20% net increase. A large proportion of issued bonds are callable as they allow borrowers greater flexibility.
Legal initiatives to promote securitisation:
The Danish mortgage credit Act has been amended several times and the latest amendment has allowed all mortgage banks to grant mortgage loans to agricultural property with a general maximum limit of 70% of the value of the property.
With regard to regulation, the Danish Ministry of Economic Affairs has set up a large committee with the task of examining the challenges that the financial sector will face after year 2000.