According to Nasdaq Copenhagen, covered bonds worth close to DKK 25bn were purchased and sold daily in 2010, equivalent to about DKK 6,300bn annually. Given the considerable trading volumes, the official prices, except in rarely traded series, reflect the current market conditions. Ultimately, the volume and the continuous trading help ensuring that borrowers obtain a fair price when raising mortgage loans or prepaying existing loans. Danish mortgage banks issue new covered bonds on an ongoing basis, the so-called tap issuance. Consequently we have a mortgage market with a daily issuance in existing bond series.
Liquidity and Turnover
The outstanding amount of bonds frequently changes hands, although some bond series are subject to less trading than others. According to Nasdaq Copenhagen, covered bonds worth close to DKK 25bn were purchased and sold daily in 2010, equivalent to about DKK 6,300bn annually.
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Finance Denmark is a business association for banks, mortgage institutions, asset management, securities trading and investment funds in Denmark. Our members are mortgage institutions, banks, savings banks, cooperative savings banks, Danish branches of foreign banks, asset managers, Danish securities dealers and investment funds.
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