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-Moody's rates Danske Bank covered bonds at final Aaa.

BANKING AND CREDIT NEWS-October 18, 2010--Moody's rates Danske Bank covered bonds at final Aaa(C)2010 M2 COMMUNICATIONS

18 October 2010 - Moody's has set a definitive Aaa long-term rating to covered bonds issued by Denmark's Danske Bank A/S (CPH:DANSKE) under the Danish Covered Bond law.

The rating was assigned to Danske Bank's NOK500m (USD85.4m/EUR61.3m) covered bonds due 2025. The move affected the lender's EUR25bn covered bond programme.

The covered bonds benefit from two layers of protection by having recourse to both the issuer and a collateral pool and therefore their rating factors in the credit strength of the Aa3-rated issuer and the credit quality of the cover pool, the agency said. The bonds are backed by residential mortgage loans, Moody's noted.

In addition, the rating also takes into account the issuer's maintaining 15.5% minimum over-collateralisation on an "uncommitted" basis in line with the covered bond rating, the actual over-collateralisation currently being 19%, and the Danish legal framework for covered bonds, as the covered bonds are governed by the Danish Covered Bond law, the agency said.

The covered bonds bear a Timely Payment Indicator (TPI) of "probable".

Any subsequent covered bonds issued under this programme should be set a Aaa rating and any future rating actions are expected to affect all such covered bonds, Moody's concluded.

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Publication:M2 Banking & Credit News (BCN)
Date:Oct 18, 2010
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