Question 1

What is SCBC?

Accepted Answer

SCBC (AB Sveriges Säkerställda Obligationer (publ)), known as The Swedish Covered Bond Corporation, is a specialized credit market company in Sweden licensed to issue covered bonds. It is a wholly-owned subsidiary of SBAB Bank AB, which is itself wholly owned by the Kingdom of Sweden through the Swedish Government Offices. SCBC specializes exclusively in issuing Swedish covered bonds (säkerställda obligationer) backed by high-quality mortgage assets.

The institution serves as the covered bond issuance vehicle for SBAB's lending operations, primarily financing residential mortgages through capital market funding.

Question 2

When was SCBC founded?

Accepted Answer

SCBC was incorporated in Sweden on June 24, 2003, and received its license from the Swedish Financial Supervisory Authority (Finansinspektionen) on April 12, 2019, to issue covered bonds under the Swedish Covered Bonds Act (Lag om utgivning av säkerställda obligationer). The decision to establish SCBC's covered bond programme was made by the board of directors on March 31, 2006, with the first covered bond loans issued shortly thereafter.

The company was created to provide SBAB Bank with a dedicated vehicle for accessing capital markets through covered bond issuances, separating this funding activity from the parent bank's other operations.

Question 3

Where is SCBC headquartered?

Accepted Answer

SCBC is headquartered in Solna, Sweden, which is part of the Stockholm metropolitan area. The company shares operational facilities with its parent company, SBAB Bank AB.

Question 4

Where does SCBC operate?

Accepted Answer

SCBC operates exclusively in Sweden, where it issues covered bonds in the Swedish capital markets. The covered bonds are distributed to institutional investors, banks, insurance companies, and other financial institutions primarily within Sweden and across the Nordic region. The company's cover pool consists mainly of Swedish residential mortgages originated by SBAB Bank.

Question 5

What services does SCBC offer?

Accepted Answer

SCBC provides specialized financial services focused on covered bond issuance:

Swedish Covered Bond Programme: Continuous issuance of fixed and floating rate covered bond loans denominated in SEK, issued in accordance with the Swedish Covered Bonds Act. These bonds carry the label "Swedish covered bond" (svenska säkerställda obligationer).

Covered EMTN Programme: Euro Medium Term Note programme for issuing covered bonds to international investors in multiple currencies.

Australian Covered Bond Programme: Specialized programme for issuing covered bonds in the Australian market.

Secondary Market Trading: The bank works with dealers who actively promote trading of covered bonds in the secondary market and post buy/sell interest rates.

All covered bonds issued by SCBC have the status of covered bonds under Swedish law and are provided with rights of priority over the cover pool, which consists primarily of Swedish residential mortgage loans acquired from SBAB Bank.

Question 6

What makes SCBC unique?

Accepted Answer

SCBC's unique characteristic is its exclusive focus on covered bond issuance rather than traditional banking services. Unlike conventional banks that take deposits and make loans directly, SCBC acquires mortgage loans from its parent SBAB Bank and finances these acquisitions by issuing covered bonds to institutional investors.

The covered bonds are backed by a high-quality cover pool of residential mortgages, providing investors with priority claims over these assets. This structure offers enhanced security compared to unsecured bank debt. SCBC maintains strict eligibility criteria for assets in the cover pool and conducts regular valuations to ensure adequate coverage.

As a wholly state-owned entity through SBAB Bank and ultimately the Kingdom of Sweden, SCBC benefits from the implicit backing of the Swedish government. The company is regulated by the Swedish Financial Supervisory Authority (Finansinspektionen) and must comply with stringent requirements under the Swedish Covered Bonds Act regarding asset quality, over-collateralization, and risk management.

SCBC's covered bonds are eligible for the European Covered Bond Label, meeting the quality standards of Article 129 of the Capital Requirements Regulation (CRR) and qualifying as high-quality liquid assets under the Liquidity Coverage Ratio (LCR) requirements for European banks.

Question 7

What type of financial institution is SCBC?

Accepted Answer

SCBC is a kreditmarknadsbolag (credit market company) in Sweden, which is a specialized financial institution authorized to issue covered bonds but not to take deposits from the public. This classification is specific to Swedish financial regulations and distinguishes SCBC from traditional commercial banks (bankaktiebolag). Credit market companies operate under the Banking and Financing Business Act and are subject to supervision by the Swedish Financial Supervisory Authority, but they have a narrower scope of authorized activities focused on capital market funding operations rather than retail banking services.

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