Obligatiuni garantate - Covered Bonds - Romania

1	What type of assets may be included in the cover pool?
	Primary assets Substitution assets Public sector assets Mortgage assets Other 1* Other 2* Other 3*   Exposures to public sector entities x x Exposures to credit institutions x x Residential mortgage loans x x Commercial mortgage loans x x Derivative contracts may be included as well in the cover pool but only for hedging purposes.
2	What is the geographical scope of assets?
	Primary assets Substitution assets Public sector assets Mortgage assets Other 1* Other 2* Other 3*   Domestic x x x x EU x x x x
3	Is there a maximum level for substitute assets in the statutory national framework?	Yes, please specifiy 30%
4	Are there any reporting requirements for covered bond issuers to investors?	Yes, by law and in line with art. 14 of EU Covered Bond Directive
5	What is the frequency of reporting to investors?	Quarterly

1	What is the basis for property valuation	Market value
2	Is a regular update of the property value required?	Yes, new external physical apraisal within a specific time span Yes, automated / indexed valuation sufficient
3	What are the LTV limits (single asset based)? Please specify in %/n.a.	Residential Commercial Residential: 80% if compliant with art 129 of CRR and 85% LTV at origination for high quality assets Commercial: 60% if compliant with art 129 of CRR and 70% LTV at origination for high quality assets No additional limits on portfolio basis applicable
4	Are loans in excess of LTV limits eligible for inclusion in the cover pool?	Hard limit upon inclusion but soft limit accepted following inclusion For loans compliant with art 129 of CRR, the respective LTV provisions will apply. In case of high quality assets, LTV at origination of the loan must be observed (85%/70% residential/commercial) at inclusion in the covered pool. Thereafter, soft limits are accepted.

IV.1 Derivative contracts in the cover pool

1	Are derivative contracts eligible for the inclusion in the cover pool?	Yes, exclusively for hedging purposes (by law)
2	Are there requirements for derivative contracts (e.g. eligibility criteria for hedging counterparties)?	Yes, specified in law
3	Will derivative contracts remain in case of insolvency of the issuer?	Yes
4	If derivatives are permitted in the cover pool, what is their ranking?	Pari passu to covered bond holders

IV.2 Exposure to market risk

1	What is the primary method for the mitigation of market risk?	Use of derivative hedging instruments Computation of OC under certain stress scenarios.
2	Are there mitigating provisions for interest rate risk?	Yes, by legislation/regulation
3	Are there mitigating provisions for foreign exchange risk?	Yes, by legislation/regulation
4	Are there mitigating provisions for maturity mismatch risk?	No
5	What type of coverage test is applied?	Nominal cover Present value cover
6	Are there stress scenarios applied?	Yes, by law Computation of over collateralisation under stress scenarios, i.e. shocks to the yield curve, EUR-RON exchange rate, payment patterns, housing prices decrease, the loss given default in real estate enforcement, is mandatory by law.

IV.3 Liquidity risk

1	Is exposure to liquidity risk mitigated?	Yes, by law
2	What liquidity risk mitigation requirements are in place (principal)?	180 days liquidity provisions
3	What liquidity risk mitigation requirements are in place (interest)?	180 days liquidity provisions
4	What is the consequence of not fixing a breach of liquidity risk mitigants?	Administrative penalty
5	If 180 days liquidity provisions are in place, what types of liquid assets are eligible	LCR Level 1 LCR Level 2a LCR Level 2b Short term exposures to credit institutions (Credit Quality Step (CQS) 1) Short term exposures to credit institutions (CQS 2) Short term deposits to credit institutions (CQS 1) Short term deposits to credit institutions (CQS 2) Short term deposits to credit institutions (CQS 3) Other, please specify Other: accepted by the National Bank of Romania for money market operations
6	If 180 days liquidity provisions are in place, the calculation of principal is based on:	The expected maturity date

IV.4. Maturity extension

1	Is maturity extension allowed by national law?	No
2	Is it possible to issue…	Hard bullet
3	Which trigger plays a role for maturity extension according to law - independent or alone or in combination?
4	Does any competent authority need to give its okay (or non-opposition)?

IV.5 Overcollateralisation

1

Is mandatory overcollateralisation required in the law ?

All types - 5% - NPV

V.1 Cover pool monitor (CPM)

1	Is there a cover pool monitor in addition to national competent authorities in the statutory law?	Yes, by law and in line with Article 13 of EU Covered Bond Directive
2	Is the CPM separate from the issuing credit institution?	Yes, required by national statutory law
3	Is the appointment, dismissal, eligibility criteria and the role of the CPM regulated by the national statutory law?	Yes

V.2 Banking supervision

1	Which are the national competent authorities designated to carry out covered bonds public supervision in the law?	National Bank of Romania - Website
2	Is a special permission required for a covered bond programme according to national law?	Yes, licence for institution + competent autority
3	Is there a covered bond issuance limit in law or regulation? If yes, please specify	Yes The total value of the cover pool collateralising a covered bond issuance cannot exceed certain thresholds of the issuer’s total assets, i.e. 10%, 15% or 20%, depending on the metrics defined by the National Bank of Romania.
4	Does the national statutory law provide for the appointment of a dedicated cover pool administrator in case of insolvency/resolution (transfer included acc. to BRRD [Bank Recovery and Resolution Directive])?	No
5	Which is the typical frequency in the national statutory law of reporting from the covered bond issuers to the designated competent authorities?	Quarterly

1	Does the national statutory law meet the requirements laid down in the EU Covered Bond Directive?	Yes
2	Does the statutory law meet the requirements of Article 129 of CRR [Capital Requirement Regulation]? In this case, please specify the collateral types meeting the Art. 129 CRR.	Yes art. 129 (1) a), c), d) and f)
3	Does the statutory law allow covered bonds out of the scope of Art 129 of CRR? In this case, please specify the collateral	Yes High-quality assets that ensure that the issuer has a claim for payment and are secured by collateral assets such as residential properties, commercial properties or exposures to EU entities (credit institutions or public sector entities)
4	Are listed covered bonds eligible in repo transactions with the national central bank?	Yes

Primary Legislation

• Romanian Covered Bond Law (RO).pdf (Original language)

Hypostat

• Romania.pdf (English language)

Fact Book

• 3.33 Romania.pdf (English language)

Intro CB Video

Any further comments/information?