Slovakian Covered Bonds Framework

Location:

Slovak Republic

Project number:

48618

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

14 Dec 2016

Status:

Approved

PSD disclosed:

13 Feb 2017

Sub-projects signed under this framework

Translated version of this PSD: Slovakian

Project Description

The Covered Bonds Framework is for up to EUR 200 million investment ("Sub-projects") in a series of newly issued mortgage covered bonds by commercial banks operating in Slovakia ("Issuer" or "Issuers"), over the next three years. Eligible covered bonds will have a 5 to 10 year (bullet) maturity.

Project Objectives

The Sub-projects will support Issuers to access medium-term funding by using a covered bond instrument collateralised by a pool of residential mortgage loans. The proceeds from the Sub-projects will be used to (i) restructure their balance sheet (address asset-liability maturity mismatches for existing and new assets), (ii) diversify funding sources and (iii) finance mortgage loans.

Transition Impact

The transition impact of transactions under the Covered Bonds Framework is expected to derive from:

Market expansion: support the development of the local capital markets, demonstrating that covered bonds can be an effective funding tool for Slovak banks - the covered bond market in Slovakia is relatively small.

Demonstration of successful restructuring: support the asset-liability management of the Slovak banks. The current funding structure of the banking system results in maturity mismatches, which creates potential systemic vulnerabilities.

Demonstration of high standards: EBRD's involvement in the policy dialogue with the Slovak authorities will support the development of an adequate covered bond framework in Slovakia in line with (i) existing standards in other EU jurisdictions and (ii) recommendations of the European Banking Authority.

Client Information

The Covered Bonds will be available for commercial bank institutions in Slovakia.

EBRD Finance Summary

EUR 200,000,000.00

EUR 200 million.

Total Project Cost

EUR 1,000,000,000.00

With maximum EBRD investment of 20% of each covered bond issuance, the estimated total cost of projects under the Covered Bonds Framework is above EUR 1 billion.

Environmental and Social Summary

Categorised FI (2014 ESP). All banks participating under the Covered Bonds Framework will be required to comply with EBRD PRs 2 , 4 and 9; adopt and implement the EBRD's E&S Risk Management Procedures as appropriate; and submit Annual Environmental and Social Reports to the Bank.

Technical Cooperation

As part of the policy dialogue, EBRD has a technical cooperation project with the Slovak Ministry of Finance working on improving the existing covered bonds legal and regulatory framework.

Company Contact Information

Andreea Moraru
morarua@ebrd.com
00442073386718
00442073386119
www.ebrd.com
 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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