As the Danish corporate bond market is built up, the establishment of Nordic Trustee A/S will contribute to generating greater activity in this market. The new company will undertake the role as representative (trustee) for the bondholders, and will participate actively in developing the corporate bond market.
VP SECURITIES A/S, together with Norsk Tillitsmann (Norwegian Trustee), is establishing a joint venture under the name of Nordic Trustee A/S. Each of the two companies has a 50-per-cent ownership interest.
In the wake of the financial crisis, the focus has been on the opportunities for companies to achieve financing by issuing corporate bonds, and political efforts have concentrated on improving the framework for the development of this market. Most recently, a Danish Act has been passed that, among other things, permits the use of trustees and allows securitisation. This Act became law as of 1 January 2014.
"At VP, during the past year we have been in ongoing dialogue with representatives of the financial market on the role that VP can play in developing the Danish corporate bond market, including the need to establish trustee services. There has been agreement on the need for a well-functioning trustee function as part of the Danish financial infrastructure - among other things in order to standardise processes and prospectuses. The Norwegian model in particular has been used as an example, as Norway has a large, well-functioning corporate bond market. Therefore it gives us great pleasure today to announce our cooperation with Norsk Tillitsmann on the establishment of the new company that, from now on, will offer trustee services to Danish bond issuers," says Niels Olsen, CEO of VP SECURITIES.
Norsk Tillitsmann is the Nordic region's leading supplier of trustee services for bond loans, handling loans for more than NOK 1,000 billion.
"For more than 20 years, Norsk Tillitsmann has played a key role in the Norwegian bond market. Our trustee scheme has given investors an effective system for the protection and handling of their rights, and the scheme has also enhanced flexibility for borrowers. This has resulted in an expanded Norwegian bond market, especially the market for corporate bonds. Together with VP, we are looking forward to building up this trustee scheme in Denmark and to playing an active role in the further development of the Danish corporate bond market," says Ragnar Sjoner, CEO of Norsk Tillitsmann.
"The cooperation between VP and Norsk Tillitsmann gives Denmark a strong player in the trustee services area. Norsk Tillitsmann contributes expertise that it has built up over many years, as well as customised IT systems for trustee services, while VP has a strong local base that includes close contact with all relevant market participants. VP also contributes strong investor service experience and has developed a number of services to connect issuers and investors, supporting such aspects as bondholder meetings. We believe that our new joint company can contribute to a well-functioning bond market and thereby also a stronger flow of capital to Danish companies," Niels Olsen concludes.
For further information please contact:
CEO Niels Olsen, telephone no. (+45) 2114 2141
See also www.nordictrustee.dk
What is a trustee?
In many countries, the market for corporate bonds plays a significantly greater role than in Denmark, and in these countries the trustee function is incorporated in the corporate bond infrastructure. A trustee is the shared point of contact between issuers and investors and includes the following functions: handling bondholders' rights vis-à-vis issuers; monitoring the development in the loans and compliance with terms and conditions; and coordination of bondholder meetings and handling of cases of breach of the loan conditions. In addition, a trustee plays a key role in the standardisation of the loan documentation and the development of a market standard for prospectuses - in order to make bond Issuance more flexible and inexpensive.
VP SECURITIES in brief
VP SECURITIES (VP) provides solutions and know-how to the financial sector and limited liability companies engaged in securities administration and investor service. VP undertakes the book-entry of securities in Denmark and Luxembourg, contributing to rapid, inexpensive and secure securities transactions, for the benefit of all market participants, Most Danish listed securities are issued and held at VP as dematerialised securities. VP also ensures the effective intermediation of interest, redemption and dividend payments from issuers to investors. VP is the largest provider of AGM services in Denmark.
Norsk Tillitsmann in brief
Norsk Tillitsmann's primary activity is to act as trustee for bond investors. The company has close to 2,000 such assignments, comprising bonds for a value of approximately NOK 1,000 billion. Norsk Tillitsmann is owned primarily by Norwegian and Nordic banks, life assurance companies and securities dealers. With a head office in Norway, Norsk Tillitsmann has subsidiaries in Sweden and Finland. Read more at www.trustee.no