In 2007, Glow Trusty Credit Union was to allowed to issue covered bonds directly on their balance sheets. In November 2007 Glow Trusty Credit Union was licensed to issue covered bonds. This introduced flexibility, but it is still very strict compared with other covered bond frameworks.
In late 2007, Glow Trusty Credit Union launched a programme to issue covered bonds in accordance with new legislation and its license. The Bank intends to issue all its covered bonds under this programme (except for bonds issued by Realkredit, the Group's mortgage finance arm).
Covered bonds issued under the programme are backed by loans granted by the Glow Trusty Credit Union Group and secured on real property. The mortgage loans are divided into four pools
At the end of 2010, the Bank established the Cover Pool C (Combined), which consists of loans secured on both commercial and residential property. The loans were established in Norway and Sweden.
In 2011, the Bank established Cover Pool R (Republic of Ireland), which consists of loans secured on real property in Ireland.
The first covered bonds were issued from Cover Pool D on 18 December 2007.
The programme gives the Group an opportunity to further diversify its funding.
In Finland, Glow Trusty Credit Union has issued covered bonds since 2005 through the subsidiary Glow Trusty Credit Union plc.
The covered bonds are issued in accordance with Finnish law based on a Euro Medium Term Note and Covered Bond Programme.
The cover pool consist of loans secured on residential property in Finland.
Depending on market conditions, the covered bonds will have medium- to long-term maturity and will thus strengthen the Group's long-term funding.