Investors in debt & capital instruments

Get a quick overview of the Jyske Bank Group in the Credit Profile and find more information on funding and issuance of debt instruments in Funding Programs below.

Jyske Bank Credit Profile

Funding programs

Jyske Bank issues bonds and debt instruments in the international financial markets. Debt instruments issued by Jyske Bank A/S can be rated by Standard & Poor’s, see ratings for the specific ratings applied to different types of debt instruments.

Short term funding
Jyske Bank set up a French commercial paper program in 2006 to strengthen diversification of short term funding sources and prolong the duration of the short term funding. Banque de France regulates the program and the Information Memorandum as well as market statistics can be found via the below links:

Long term funding
Jyske Bank set up an EMTN program in 1997. The first senior unsecured public benchmark bond was issued in 2003 and Jyske Bank has since 2011 been an active issuer in the European capital markets.

Jyske Bank's 2022 EMTN Prospectus includes the possibility to issue preferred senior (“PS”) notes as well as non-preferred senior (“NPS”) notes in addition to subordinated Tier 2 notes and AT1 notes. The Prospectus can be found below:

Jyske Bank 2022 EMTN Prospectus

 

MREL

The Jyske Bank Group’s MREL comprises of:

  • Banking activity requirement
    • 2 x solvency requirement (loss absorption + recapitalisation) incl. all buffer requirements (counter cyclical buffer (“CCyB”) not doubled up)
    • Calculated on the basis of REA for banking activities only
  • Mortgage activity requirement
    • Capital requirement (loss absorption) and the debt buffer for mortgage institutions which must be 2% of total unweighted mortgage loans
  • Group requirement:
    • The sum of the group’s capital requirement, debt buffer requirement and bail-inable liabilities must be above 8% of the group’s total liabilities and own funds (TLOF)

Group capital that is utilised towards the mortgage bank’s capital and debt buffer requirements is not eligible to count towards the banking activity MREL requirement.

From January 2022 the regulatory constraint has been the highest of the 8% of Group TLOF requirement and the combined requirement (MREL for banking activities + capital requirement for mortgage activities + mortgage debt buffer)

MREL is set by the Danish FSA on an annual basis as a percentage (%) of banking activity REA.

  • The percentage will remain fixed for the following year, but the actual requirement in DKKbn will be dynamic (an increase in banking REA will increase the MREL requirement in DKK bn and vice versa).
  • If the capital requirements change (e.g., the reintroduction of the countercyclical buffer (“CCyB”)), the FSA sets a new MREL requirement as a percentage of banking activity REA.
  • Variations in Pillar II will not automatically trigger a new MREL requirement.

Countercyclical buffer (“CCyB”)
As of 31 March 2023 the Danish CCyB requirement has been fully phased in again and constitutes 2.5 % of REA. The CCyB must be subordinated as it is to be fulfilled by CET1.

Upper limit for subordination
BRRD II imposed an upper limit for subordination in the MREL requirement related to banking activities, set as the highest of:

  1. 2 x the solvency requirement plus 1 x the combined buffer requirement (~DKK 42bn)
    and
  2. 8 % of banking TLOF (~DKK 22bn)

For the Jyske Bank Group’s banking activity MREL, “a” is the highest. Consequently, the PS allowance for the Jyske Bank Group is 4% of banking activity REA (DKK 148bn end of March 2023) which mirrors the combined buffer requirement (“CBR”) excl. of the CCyB and can be calculated as DKK 5.9bn at the end of March 2023.

Group requirements
For a graphic overview of the Group level requirement for 2023 look HERE.
The yellow “MREL resources 31 March 2023” reflect the Group capital (CET1 of DKK 34.7bn, AT1 of DKK 3.2bn and Tier 2 of DKK 6.1bn) as well as NPS and MREL eligible PS of respectively DKK 20.2bn and DKK 5.7bn available as at end March 2023, which constitute DKK 70.0bn.

The Group requirement for each actual quarter is set as the higher of the 8 % of Group TLOF or the combined banking MREL + capital & debt buffer requirement in Jyske Realkredit. If the 8 % requirement is the highest, the debt buffer requirement in Jyske Realkredit will be increased with the difference between the 8 % and the combined requirement. For Q1 2023 the 8 % of TLOF (DKK 786bn) constitute DKK 62.9bn. The combined requirement with the 2 % debt buffer (DKK 6.8bn) is DKK 66.6bn and thus the binding Group requirement in Q1 2023.

MREL requirements for banking activities

Jyske Bank – banking activity capital & MREL requirement
% of banking activity REA MREL Position
31.03.2023		 MREL Position DKKbn
31.03.2023		 MREL requirement 2023 MREL reg. in DKKbn
31.03.2023
MREL 34.0% 50.3 31.7% 46.9
Hereof subordinated MREL 30.1% 44.6 27.7% 41.0
Hereof non subordinated MREL 3.9% 5.7
 4.0% 5.9

For a graphic overview look HERE.

The yellow “MREL resources 31 March 2023” reflect the Group capital available to comply with the banking activity capital and MREL requirements after deducting resources needed in JRK (see above under “Group requirements”). The MREL requirement of 31.7 % of banking activity REA (DKK 148bn) incl. of the 4 % PS allowance/CBR is DKK 46.9bn end of Q1 2023 vs. available resources end Q1 2023 of DKK 50.3bn.

Debt instruments (senior preferred & senior non-preferred)

Below you can find an overview of outstanding benchmark bond issues and download the Final Terms of the bond issues.

S&P ratings of the senior bonds: A for preferred senior, BBB+ for non-preferred senior.

Preferred senior benchmark bonds in the market:

  • SEK 1.2bn fixed rate bond (XS2468436949) – 3 year maturity (April 2025) but may be called by Jyske Bank in April 2024 (3NC2 structure)
  • SEK 1.8bn floating rate bond (XS2468437160) – 3 year maturity (April 2025) but may be called by Jyske Bank in April 2024 (3NC2 structure)

Non-Preferred senior benchmark bonds in the market:

  • EUR 500m fixed rate note (XS2015231413) – issued in June 2019 – 5 year maturity (June 2024) but may be called by Jyske Bank in June 2023 (5NC4 structure). The bond has been called.

  • EUR 500m fixed rate note (XS2243666125) – issued in October 2020 – 5 year maturity (October 2025) but may be called by Jyske Bank in October 2024 (5NC4 structure)
  • EUR 500m non preferred senior fixed rate note (XS2382849888) – green bond issued in September 202 – 5 year maturity (September 2026) but may be called by Jyske Bank in September 2025 (5NC4 structure)
    See more about green bonds under Green bonds further below.

  • EUR 500m fixed rate note (XS2544400786) – issued in October 2022 – 3.5 year maturity (April 2026) but may be called by Jyske Bank in April 2025 (3.5NC2.5 structure)

  • EUR 500m non preferred senior fixed rate note (XS2555918270) – green bond issued in November 2022 – 5 year maturity (November 2027) but may be called by Jyske Bank in November 2026 (5NC4 structure)
    See more about green bonds under Green bonds further below.

  • SEK 1bn non preferred senior fixed to floating rate note XS2582406935) – green bond issued in February 2023 – 4 year maturity (February 2027) but may be called by Jyske Bank in February 2026 (4NC3 structure)
  • SEK 1.25bn non preferred senior floating rate note (XS2582407156) – green bond issued in February 2023 – 4 year maturity (February 2027) but may be called by Jyske Bank in February 2026 (4NC3 structure)
    See more about green bonds under Green bonds further below.

  • EUR 500m non preferred senior fixed rate note (XS2615271629) issued in April 2023 – 5.5 year maturity (October 2028) but may be called by Jyske Bank in October 2027 (5.5NC4.5structure)

For a full survey of the redemption profile of the Jyske Bank Groups long term debt please see Credit Profile above.

Capital instruments (Tier 2 and AT1)

Tier 2 bonds

In March 2017 (with value date in April 2017) Jyske Bank A/S issued EUR 300m of 12NC7 subordinated Tier 2 bonds under the EMTN programme:

The bond has final maturity in April 2029 and an issuers call right in April 2024. The bond is rated BBB by S&P.

In January 2020 Jyske Bank A/S issued EUR 200m of 11NC6 subordinated Tier 2 bonds under the EMTN programme:

The bond has final maturity in January 2031 and an issuers call right in January 2026. The bond is rated BBB by S&P.

In March 2021 Jyske Bank A/S issued dual-tranche SEK & NOK 10NC5 subordinated Tier 2 bonds under the EMTN programme:

The bonds have final maturity in March 2031 and an issuers call right in March 2026. The bonds are rated BBB by S&P.

In August 2022 Jyske Bank A/S issued triple-tranche DKK, NOK & SEK 10NC5 subordinated Tier 2 bonds under the EMTN programme:

The bonds have final maturity in August 2032 and an issuers call right in August 2027. The bonds are rated BBB by S&P.


AT1 bonds

In September 2017 Jyske Bank A/S issued EUR 150m additional Tier 1 (AT1) capital:

  • EUR 150m of Fixed Rate Notes (interest rate of 4.75%) ISIN XS1577953331

The AT1 issue has perpetual maturity and may be called by Jyske Bank A/S in September 2027 at the earliest. The bonds are rated BB+ by S&P.

In April 2019 Jyske Bank A/S issued SEK 1bn additional Tier 1 (AT1) capital:

  • SEK 1bn of Floating Rate Notes (interest rate of 3M STIBOR + 5 %) ISIN XS1843442119

The AT1 issue has perpetual maturity and may be called by Jyske Bank A/S in April 2024 at the earliest. The bonds are rated BB+ by S&P.

The prospectuses for the two standalone AT1 capital issues can be found below:
AT1 prospectuses (EUR 150m and SEK 1bn)

On 26 May 2021 (with value date 4th June 2021) Jyske Bank A/S issued EUR 200m additional Tier 1 (AT1) capital:

The AT1 issue has perpetual maturity and may be called by Jyske Bank A/S at any date from 4 December 2028 to (and including) the First Reset Date (6-month par call) or any Interest Payment Date thereafter.
The bonds are rated BB+ by S&P and are issued under Jyske Bank’s EMTN program.

Green bonds

Climate is a material impact area for Jyske Bank, and we have focus on identifying business areas that can contribute to sustainable solutions and help to reduce CO2e-emissions. 

To support the growth of our lending for sustainable activities, we have defined principles for financing of sustainable lending through the issue of Green Bonds from both Jyske Bank A/S and Jyske Realkredit A/S.

The principles for Green Bonds issued by the Jyske Bank Group have been defined according to ICMA’s Green Bond Principles and follow the guidelines for selection, reporting and allocation of funds.

An independent assessment of our Group Green Finance Framework has been performed by Sustainalytics. Sustainalytics concludes that “the Jyske Bank Group Green Finance Framework is credible and impactful”. 

For more information on our Green Finance Framework and to see the 2nd party opinion from Sustainalytics please use these links: 

Jyske Bank Group Green Finance Framework November 2022
Jyske Bank Group Green Finance Framework 2021
2nd party opinion from Sustainalytics
Green Finance Framework Report - February 2021

For more information on Sustainability at Jyske Bank use this link.

Green bonds issued by Jyske Bank:

Funding plans & issuance of capital instruments

Overall issuance of capital instruments (AT1 and Tier 2) is driven by regulatory requirements. Ongoing capital management aims to keep the outstanding amount of such instruments at a fixed percentage of REA to optimize capital structure. Timing of issuance will naturally depend on the spread requirement (market price) of capital instruments compared with cost of capital (CET1).

Senior issuance is driven primarily by MREL requirements but might also be influenced by NSFR.

Based on the expected REA increase from organic growth and changed regulation, Jyske Bank anticipates a requirement for MREL-eligible debt instruments in an amount of DKK 25bn - 27bn (EUR 3.4-3.6bn) by end of 2023:

  • ~DKK 6bn (EUR 0.8bn) PS debt
  • ~ DKK 19-21bn (EUR 2.6-2.8bn) of NPS debt

The outstanding MREL eligible instruments reflect the statutory requirements as well as an internal buffer to the statutory requirements.

Jyske Bank’s recurring funding plan will include an annual senior benchmark bond (EUR 500m) as one of the most important elements.

Dependent on market pricing issuance of a sub benchmark AT1 is likely in (2H) 2023.