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IPE special report May 2018

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PenSam acquires DKK2.2bn mortgage bond portfolio

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  • PenSam acquires DKK2.2bn mortgage bond portfolio

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DENMARK – Danish pensions provider PenSam is buying up a DKK2.2bn (€295m) portfolio of mortgage bonds from the country’s state liquidator Finansiel Stabilitet and says it will make a good return on the deal.

The portfolio contains 6,000 mortgage bonds, or pantebreve, with remaining debt of around DKK2.2bn.

It represents the entirety of the mortgage bond business Finansiel Stabilitet has been left with after winding up or selling off various struggling banks.

PenSam, declining to say how much it paid for the bonds, said it would outsource the daily administration of the mortgage bond portfolio to Halkin Credit Management.

PenSam’s investment director Benny Buchard-Andersen said he was pleased with the deal.

“We are helping to clean up after the financial crisis, and, at the same time, we are able to get a good return for the benefit of our pension customers,” he said.

He noted that the global economy was now improving, and that PenSam expected yields to rise.

“We have built up the necessary skills to be able to move out of bonds into other asset classes with better potential returns,” he added.

As part of the deal between the three parties, 20 staff will transfer to Halkin Credit Management from the state agency.

Finansiel Stabilitet said the deal concluded an open sales process that began in April.

Niels Olsen, group director at Finansiel Stabilitet, said: “We had a lot of interest in the mortgage bond activities, and we’re glad to have signed an agreement with PenSam and Halkin that also includes the staff at Finansiel Stabilitet employed within this business area.”

The deal also helped the liquidator make significant progress in the unwinding of business activities that had been taken over from distressed banks, it said.

Most of the mortgage bonds in the portfolio came from Gudme Raaschou Bank, the agency said, but some were from other banks it took over.

The agreement is subject to approval by the competition authority, and the transfer of the assets is expected to take place in the fourth quarter of this year, Finansiel Stabilitet said.

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