Question 1

What is Møre Boligkreditt?

Accepted Answer

Møre Boligkreditt is a specialized Norwegian mortgage credit institution that operates as a wholly owned subsidiary of Sparebanken Møre, a regional savings bank based in Ålesund, Norway. The institution is licensed to operate as a mortgage company and issue covered bonds, serving as Sparebanken Møre's most important source of long-term market funding.

As a specialist mortgage finance company, Møre Boligkreditt focuses exclusively on acquiring residential mortgages from its parent bank and financing them through covered bond issuance. The company operates under Norway's covered bond legal framework and holds an Aaa rating from Moody's for all its covered bonds.

Question 2

When was Møre Boligkreditt founded?

Accepted Answer

Møre Boligkreditt AS was established as part of Sparebanken Møre's long-term funding strategy following the introduction of Norway's covered bond legislation in 2007. The institution was founded with the specific purpose of funding the parent bank through issuing covered bonds, helping to ensure proper asset management within the Sparebanken Møre Group.

The company received its authorization from the Financial Supervisory Authority of Norway (Finanstilsynet) on April 28, 2019, according to EBA records.

Question 3

Where is Møre Boligkreditt headquartered?

Accepted Answer

Møre Boligkreditt is headquartered in Ålesund, Norway, at Keiser Wilhelmsgate 29/33, which is also the headquarters of its parent bank, Sparebanken Møre.

Question 4

Where does Møre Boligkreditt operate?

Accepted Answer

Møre Boligkreditt operates primarily in Møre og Romsdal county in Norway, serving the same geographic market as its parent bank, Sparebanken Møre. The institution acquires residential mortgage loans exclusively from Sparebanken Møre's lending portfolio within this region.

All mortgages in the company's cover pool are secured by Norwegian residential properties located in the bank's operational area.

Question 5

What services does Møre Boligkreditt offer?

Accepted Answer

Møre Boligkreditt provides specialized mortgage financing services through a business model focused on:

Mortgage Acquisition: The company acquires qualifying residential mortgages from Sparebanken Møre that meet strict loan-to-value (LTV) requirements of 75% or less at the time of acquisition.

Covered Bond Issuance: As its primary activity, Møre Boligkreditt issues covered bonds in the Norwegian and international capital markets to fund its mortgage portfolio. The bonds feature a soft bullet structure, allowing the company to extend borrowing terms by up to 12 months if needed.

Risk Management: The institution utilizes financial derivatives to manage interest rate and currency risks, maintaining very low market risk as required by Norwegian regulations.

As of 2020, the company's mortgage portfolio exceeded NOK 29 billion, with outstanding covered bond loans totaling approximately NOK 24 billion.

Question 6

What makes Møre Boligkreditt unique?

Accepted Answer

Several distinctive features set Møre Boligkreditt apart:

Premium Credit Rating: All covered bonds issued by the company carry an Aaa rating from Moody's, the highest possible rating, reflecting the superior quality of its mortgage portfolio and strict regulatory framework.

High Asset Quality: The average loan-to-value ratio of mortgages in the cover pool was 56.6% as of year-end 2020, well below the 75% regulatory limit, indicating conservative lending practices and low credit risk.

Lean Operations: The institution operates with no direct employees, dedicating one full-time equivalent from Sparebanken Møre to the mortgage company, with other services outsourced through specific agreements with the parent bank.

Strong Liquidity Position: Møre Boligkreditt maintains exceptionally strong liquidity, reporting a Liquidity Coverage Ratio (LCR) of 566% at year-end 2020, far exceeding regulatory requirements.

Specialized Focus: Unlike traditional banks, the company's narrow mandate focuses exclusively on residential mortgage financing through covered bonds, ensuring transparency and operational efficiency.

Question 7

What type of financial institution is Møre Boligkreditt?

Accepted Answer

Møre Boligkreditt is classified as a credit institution (kreditforetak) under Norwegian banking regulations, specifically a specialized mortgage credit institution authorized to issue covered bonds.

In Norway, this type of institution is distinct from traditional commercial or savings banks. Mortgage credit institutions like Møre Boligkreditt must operate under strict legal frameworks defined by the Norwegian Financial Undertakings Act and regulations from the Financial Supervisory Authority of Norway (Finanstilsynet). They can only acquire mortgages and issue covered bonds as their primary business activities, with very limited ability to take on other banking risks.

The institution is subject to the same capital adequacy requirements, liquidity management rules, and prudential regulations as other Norwegian financial institutions, but with additional restrictions specific to covered bond issuers. These include mandatory asset coverage tests, strict LTV limits, independent cover pool monitoring, and ring-fencing provisions to protect bondholders.

Question 8

What is Møre Boligkreditt's role in the Norwegian covered bond market?

Accepted Answer

Møre Boligkreditt is one of approximately 24 specialized mortgage credit institutions in Norway authorized to issue covered bonds. The Norwegian covered bond market is considered one of the most robust in Europe, with a legal framework that has been praised as among the best for covered bond issuance.

The company issues bonds under the "OMF Premium" classification, which corresponds to European Covered Bond Premium status under EU regulations. This designation requires strict adherence to cover asset requirements defined in the Capital Requirements Regulation (CRR) Article 129.

Through its covered bond issuance, Møre Boligkreditt provides Sparebanken Møre with stable, long-term funding that is less dependent on short-term market conditions than traditional deposit funding. This diversification strengthens the overall funding profile of the Sparebanken Møre Group.

Question 9

How is Møre Boligkreditt regulated and supervised?

Accepted Answer

Møre Boligkreditt operates under comprehensive regulatory oversight from the Financial Supervisory Authority of Norway (Finanstilsynet). The institution must comply with Norwegian covered bond legislation, which includes:

Cover Pool Monitoring: An independent cover pool monitor, appointed by the institution and notified to Finanstilsynet, reviews compliance with legislative requirements at least quarterly and reports annually to the supervisory authority.

Asset Coverage Tests: The company must perform regular asset ratio tests to ensure that assets in the cover pool exceed liabilities at all times, with loans in arrears for more than 90 days excluded from the calculation.

Register Maintenance: A detailed, updated pool register must be maintained containing information about all assets and liabilities covered by the pool, providing evidence of preferential claims.

Strict Business Limitations: The institution faces strict limitations on the types of business it can conduct, interest rate risk, currency risk, and overall market risk exposure.

The company is also subject to the Norwegian deposit guarantee scheme (NO_BSI) and participates in the broader European banking supervision framework as a credit institution under the Capital Requirements Directive.

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