Denmark-based Nykredit would be refinancing its DKK 11 billion or USD 2 billion debt. In a phone interview with Bloomberg, Chief Financial Officer Soeren Holm said the mortgage issuer intended to do so by issuing preferred stock and contingent convertible debt.
According to Holm, the refinance facility would replace the debt set to expire next year and in 2015. He said that by issuing preferred stock, Nykredit would be able to meet stricter capital requirements without the need to go public.
Holm said Nykredit would still be asking the approval of the government to allow them to issue the preferred stock since current legislation prevented them from doing so. He added that they expected a bill to be passed on the matter next year. After Nykredit gets approval to sell preferred stock, it would also be able to issue notes that could be converted to equity.
Nykredit needed to fulfill an equity requirement of DKK 70 billion by 2019. In its second quarter earnings report, the lender only had equity of DKK 58.6 billion.
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