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 2024 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 liabilities subject to bail-in 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).

Countercyclical buffer (“CCyB”)
The Danish CCyB requirement was fully re-phased in at the end of March 2023, and since then has constituted 2.5 % of REA. The CCyB must be subordinated, as it is to be covered by CET1

Systemic Risk Buffer for commercial real estate exposures (“CRE-buffer”)
The Danish Minister for Industry, Business and Financial Affairs has followed The Danish Systemic Risk Council’s recommendation to activate a sector-specific CET1 Systemic Risk Buffer with a buffer rate of 7% for exposures to real estate companies in Denmark, from 30 June 2024.

The CRE buffer is not to be dissolved in stress tests (as is the case with the CCyB). Consequently, in addition to increasing the capital requirements it will also increase the MREL requirements for banking activities.

The impact will be calculated as:

    • An amount equivalent to 7 % of the REA of the designated CRE sectors added to the CET1 capital requirement of Jyske Realkredit.
    • An amount equivalent to 7 % of the REA of the designated CRE sectors in Jyske Bank added to the CET1 capital requirement of Jyske Bank. In addition, the same requirement is added to the combined buffer requirement meaning that through the MREL requirement for banking activities the requirement is effectively being accounted for twice.
    • Exposures with LTVs 0-15 % are excluded from the requirement (in practice this only has an impact on the CRE exposures in Jyske Realkredit).

The Systemic Risk Council must evaluate the buffer requirement at least every two years (and it can be released fully or partially, if the identified systemic risks materialize or abate). However, The Danish Ministry of Industry, Business and Financial Affairs has promised to revise the buffer in a year (following the implementation on 30 June 2024).

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”) or any other systemic risk buffer such as the “CRE-buffer” from Q2 2024), a new MREL requirement will be set as a percentage of banking activity REA.
  • Variations in Pillar II or CRE exposures during any particular year will not automatically trigger a new MREL requirement.

Requirements for Q2 2024

With the implementation of the new “CRE-buffer” by 30 June 2024, Jyske Bank’s Group CET requirement as well as the MREL requirement have increased.

As of 30 June 2024, the additional “CRE-buffer” CET1 requirement for Jyske Realkredit is DKK 1.4bn corresponding to 1.6 % of Jyske Realkredit’s REA (DKK 88.3bn) end of Q2 2024. Calculated relative to Group REA of DKK 231.2bn it reflects an additional CET1 charge of 0.6 %.

Looking at MREL requirements for banking activities REA (DKK  146bn) the “CRE-buffer” results in an additional CET1 charge of 0.22 % (DKK 0.3bn). Calculated relative to Group REA of DKK 231.2bn it reflects an additional CET1 charge of 0.14 %. The CRE buffer requirement therefore leads to a total increase in the Group’s CET1 requirement of 0.8 % end of Q2 2024.

In addition, it increases the MREL requirements for banking activities with 0.14 % of banking activity REA (DKK 146bn) corresponding to DKK 0.3bn.

Consequently, the Q2 2024 MREL requirement has been calculated as 32.3 % of which 28.1 % is subordinated.

Group requirements

The calculation of Jyske Bank’s “Group requirements” are based on the highest of either 8 % of TLOF (DKK 770.0bn) which is DKK 61.6bn, or the” Combined requirement” with the 2 % debt buffer (DKK 7.1bn) which is DKK70.3bn and thus the binding Group requirement for Q2 2024.

If the 8 % requirement is the highest, the debt buffer requirement in Jyske Realkredit will be increased by the difference between the 8 % and the combined requirement.

The “Resources Q2 2024” reflect total Group MREL eligible resources which amount to DKK 82.2bn; Group capital (CET1 of DKK 38.4bn, AT1 of DKK 4.8bn and Tier 2 of DKK 7.5bn) as well as NPS and MREL eligible PS of respectively DKK 27.7bn and DKK 3.7bn.

Requirements for banking activities

 The yellow “Resources 30 June 2024” reflect the Group capital and MREL eligible liabilities available to comply with the banking activity requirements after deducting resources needed in JRK (see above under “Group requirements”). The MREL requirement of 32.3 % of banking activity REA (DKK 145.5bn) incl. of the 4.2 % PS allowance/CBR is DKK 47.1bn end of Q2 2024 vs. available resources end of Q2 2024 of DKK 59.0bn.

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 30.06.2024 59.0 55.3 3.7
MREL req. DKKbn 30.06.2024 47.1 40.9 6.1
MREL buffer DKKbn 30.06.2024 11.9 14.4 -2.4*
MREL position/ressources (%) 30.06.2024 40.5% 38.0% 2.5%
MREL requirement (%) 30.06.2024 32.3% 28.1% 4.2%
MREL buffer % 30.06.2024 8.2% 9.9% -1.7%

*) The – DKK 2.4bn and -2.7 % simply reflect that as of 30 June 2024 Jyske does not fully use the PS allowance in BRRD2 (4.2 % as of end Q2 2024). Consequently, the MREL requirement is fulfilled with a higher proportion of NPS in the total MREL eligible liabilities.

Please find graphic illustrations of the requirements for Q2 for the Group HERE and for the banking activities HERE.

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:

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.

  • EUR 500m non preferred senior fixed rate note (XS2831594697) issued in June 2024 – 6.25 year maturity (September 2030) but may be called by Jyske Bank in September 2029 (6.25NC5.25 structure)

For a full overview of the call-profile of the Jyske Bank Groups long term debt (NPS & PS) please see HERE. Bonds that have been called are not included in the graph.

Capital instruments (Tier 2 and AT1)

Tier 2 bonds

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.

In January 2024 Jyske Bank A/S issued EUR 500m of 11.25NC6.25 subordinated Tier 2 bonds under the EMTN programme:

The bond has final maturity in May 2035 and an issuers call right “Optional Redemption Date” on each Business Day falling in the period from (and including) 1 February 2030 to (and including) 1 May 2030.

The bond is 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.

The Prospectus can be found here.

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 on 4 June 2029 (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.

On 6 February 2024 (with value date 13 February 2024) Jyske Bank A/S issued EUR 300m additional Tier 1 (AT1) capital:

The AT1 issue has perpetual maturity and may be called by Jyske Bank A/S at any date from 13 August 2030 to (and including) the First Reset Date on 13 February 2031 (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.

For a full overview of the call-/reset profile of the Jyske Bank Groups Tier 2 and AT1 bonds please see HERE. Bonds that have been called are not included in the graph.

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 outstanding MREL-eligible debt instruments in 2024 in an amount of DKK 29-31bn (EUR 3.9-4.2bn):

  • ~ DKK 6bn (EUR 0.8bn) PS debt
  • ~ DKK 23-25bn (EUR 3.1-3.4bn) of NPS debt

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

End of June 2024 the outstanding amount of MREL eligible debt instruments constituted DKK 31.4bn hereof DKK 27.7bn NPS and DKK 3.7bn PS.

Next expected bond issuance from Jyske Bank:

  • Up to EUR 500m PS before end of Q1 2025