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Fixed Income - Denmark

Large Turnover – High Transparency

The bond market in Copenhagen is among the top five in Europe measured by turnover. In 2011, the total turnover was EUR 903B (market value, excluding repo), which corresponds to approximately EUR 75.5B in monthly turnover. This turnover was distributed over 2,180 listed bonds that, by the end of 2011, had a circulating amount of EUR 552B.

The Bond market in Copenhagen is one of the most transparent in Europe. Bond members are, with only a few exceptions, required to report and publish all trades within a few minutes. The result is a market with a high level of price transparency, which benefits both issuers and investors. Price and trading data is published on nasdaqomxnordic.com.
 

Mortgage Bonds, Government Bonds, Structured Bonds, Corporate and Other Bonds

Nasdaq Copenhagen offers a wide variety of fixed income product options.

Mortgage Bonds

Danish Mortgage Bonds are uniquely suited to the ways in which property/real estate investments are funded in Denmark. The strengths of these products are:

  • The Danish law for issuance of Mortgage Bonds is stringent
  • Issuance is very cost-efficient
  • The distribution network is extensive
  • A global “balance principal” applies
  • The principle of low investor risk has been maintained since the 19th century
  • To date, no investors have lost their invested capital and no mortgage credit institution/mortgage credit bank has ever gone bankrupt
  • A clear majority of the Danish Mortgage Bonds have been rated by internationally recognized rating agencies

With a circulating amount of EUR 430B and 1,904 bonds listed by the end of 2011, the mortgage bond segment accounts for the greater part of the Danish fixed income market. The total turnover of mortgage bonds in 2011, measured by market value (excluding repo), was EUR 773B.

Government Bonds

All Danish government bonds and notes can be traded at Nasdaq Copenhagen. These are “low risk securities” that tend to attract significant interest from foreign investors.

The circulating amount of the Danish Government Bonds was EUR 108B by the end of 2011, distributed over 17 bonds. The total turnover in 2011 was EUR 122B (market value, excluding repo).

Structured Bonds

Over the last few years, Nasdaq Copenhagen has witnessed an increased interest in both issuing and investing in structured bonds. We have therefore created a special market for the issuing and trading of these bonds. Investors may choose between 153 different bonds with a total market value of approximately EUR 1B.

By creating a special market for structured bonds, Nasdaq Copenhagen hopes to increase transparency. We also expect this market to grow, creating higher turnovers, increased circulation, and more diversification.

Corporate and Other Bonds

Nasdaq Copenhagen has a special market for corporate bonds, convertible bonds, covered bonds (issued by banks) and other bonds. This market is called Corporate and Other Bonds. By having a separate market for these bonds we intend to increase focus on the many different bonds that can be traded at Nasdaq Copenhagen. In 2011, the number of listed bonds was 106 with a circulating amount of EUR 11.4B. The total turnover in 2011 was EUR 7 B (market value, excluding repo).

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