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 2023 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 2023 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”)
End of March 2023 the Danish CCyB requirement was fully re-phased in and has since then constituted 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 41bn)
    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 142bn end of September 2023) which mirrors the combined buffer requirement (“CBR”) excl. of the CCyB and can be calculated as DKK 5.7bn at the end of September 2023.

Group requirements
For a graphic overview of the Group level requirement for 2023 and Group ressources as of end of September 2023 look HERE.

The yellow “MREL resources 30 September 2023” reflect total Group MREL eligible resources which amount to DKK 72.1bn; Group capital (CET1 of DKK 36.9bn, 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.

The calculation of Jyske Bank’s “Group requirements” are based on the highest of either 8 % of TLOF (DKK 759.5bn) which is DKK 60.8bn) or the combined requirement with the 2 % debt buffer (DKK 6.7bn) which is DKK 64.9bn and thus the binding Group requirement in Q3 2023.

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.

MREL requirements for banking activities

Jyske Bank – banking activity capital & MREL requirement in % (of banking activity REA) and in DKKbn

MREL Hereof subordinated MREL Hereof non subordinated MREL
MREL Position/ressources DKKbn 30.09.2023 52.3 46.6 5.7
MREL req. DKKbn 30.09.2023 45.0 39.3 5.7
MREL buffer DKKbn 30.09.2023 7 7 0
MREL position/ressources (%) 30.09.2023 36.8% 32.8% 4.0
MREL requirement (%) 2023 31.7% 27.7% 4.0%
MREL buffer % 30.09.2023 5.1% 5.1% 0.0%

For a graphic overview look HERE.

The yellow “MREL resources 30 September 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 141.9bn) incl. of the 4 % PS allowance/CBR is DKK 45.0bn end of Q3 2023 vs. available resources end of Q3 2023 of DKK 52.3bn.

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 (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 2021 – 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)
     
  • EUR 500m non preferred senior fixed rate note (XS2715957358) – green bond issued in November 2023 – 6 year maturity (November 2029) but may be called by Jyske Bank in November 2028 (6NC5 structure)
    See more about green bonds under Green bonds further below.

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 expected REA increase and changed regulation, Jyske Bank anticipates a requirement for MREL-eligible debt instruments in 2024 in an amount of DKK 28-30bn (EUR 3.8-4.0bn):

  • ~ DKK 6bn (EUR 0.8bn) PS debt
  • ~ DKK 22-24bn (EUR 3.0-3.2bn) of NPS debt

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

End of September 2023 the outstanding amount of MREL eligible debt instruments constituted DKK 20.2bn of NPS and DKK 5.7bn of PS.

Jyske Bank issuance plans:

  • Issuance of EUR 500m of NPS is likely before end of 2023

  • Jyske Bank has not currently fully utilized the possibilities of using AT1 capital to meet the capital requirements (with the added REA from the Handelsbanken acquisition on 1 December 2022, Jyske has unused capacity for AT1).
    Further AT1 issuance is not planned until 2024. Timing of AT1 issuance during 2024 will depend on the development in the group's capital position as well as the price development in the market for AT1 capital