The Transfer of Swedish Mortgages

Bank of Åland Plc

Inside information

February 14, 2022, 9:00 a.m. EET

The transfer of Swedish mortgages and covered bonds from Bank of Åland Plc to Borgo AB has been implemented

The previously announced transfer of most of Bank of Åland’s Swedish mortgages and associated covered bonds previously issued to Borgo was completed today. The nominal amount of the mortgage portfolio that was transferred is 10.4 billion euros. The nominal amount of the previously issued covered bonds, which now have Borgo as issuer, is 7.5 billion euros. A smaller mortgage portfolio, around 2 billion euros, will be transferred later in 2022.

The transaction will have a non-recurring positive effect on the Bank of Åland’s income statement of around EUR 10 million. At the same time, this will result in a smaller loan portfolio on Bank of Åland’s own balance sheet and therefore lower current net interest income. Going forward, Bank of Åland will instead receive distribution fees for traded loans and platform revenue for maintaining various services in Borgo. The total full year effect on 2022 results is expected to be positive.

The future prospects previously communicated by the Bank of Åland are not affected by the transfer. In other words, the Bank’s net operating income in 2022 will be about the same as in 2021.

The covered bonds issued by Bank of Åland – SEK 2,000,000,000 due May 12, 2025, ISIN: SE0013359627 and SEK 5,500,000,000 due September 10, 2026, ISIN: SE0013360419 (together the “Bonds”) – have changed issuer in connection with the transfer from Bank of Åland under Finnish mortgage banking legislation to Borgo as issuer under Swedish mortgage banking legislation. February 14, 2022 is the first clearing and settlement-delivery date for the Bonds with their new ISIN codes: SE0017232366 and SE0017232358. The SEK 2,000,000,000 bond due May 12, 2025 has its coupon date on February 14, 2022. The coupon will be paid by Bank of Åland.

For more information, please contact:

Peter Wiklöf, Managing Director and Managing Director, Bank of Åland Plc (Ålandsbanken Abp), tel. +358 40 512 7505

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