Covered Bond Program
OmaSp received permission from the Financial Supervisory Authority on 14 September 2017 to start issuing mortgage banking operations, ie covered bonds. The mortgage bank operates as part of OmaSp's banking business and diversifies the bank's funding. The covered bonds are secured by mortgages issued by OmaSp. As part of the launch of mortgage banking, OmaSp applied for direct monetary policy and TARGET2. The bank's TARGET2 account with the Bank of Finland was opened in September 2017.
In November 2017, OmaSp launched a EUR 1.5 billion covered bond program. There were new issues in 2020 in April and November, when €250 million of covered bonds were issued and €55 million of senior-term and unsecured bonds in June.
Bonds play an important role in arranging the refinancing of OmaSp: their size has been consistently increased, with the aim of increasing the share of market-based debt financing in the bank's funding portfolio.
OmaSp uses investment certificates and debentures to diversify its financial portfolio and increase refinancing opportunities. Investment certificates are used by the bank specifically for short-term financing needs and liquidity management.
Financing costs decreased
Among other things, with the expanded refinancing base and successful risk management, OmaSp has succeeded in reducing its financing costs. The decline in financing costs has also been affected by lower interest rates on deposit rates, the issuance of covered bonds at relatively low interest costs and the support provided by the BBB+ credit rating from S & P in obtaining financing.