New fund widens enterprises’ access to subordinated loan capital

2 March, 2015
Danske Bank, ATP, Danica Pension and PensionDanmark have established a new fund with a start-up capital base of one billion Danish kroner. The purpose of the fund is to widen small and medium-sized Danish enterprises’ access to subordinated loan capital. By establishing the fund, the partners wish to boost growth in the Danish business sector and generate reasonable returns to pension savers.
Small and medium-sized Danish enterprises (SMEs) form the backbone of the Danish economy and are vital for future growth and jobs. It has become easier to get access to bank lending in recent years, but banks have been criticised for not making enough subordinated loan capital available.  
Danske Bank, ATP, Danica Pension and PensionDanmark have therefore looked into the possibility of providing more capital to SMEs in the form of subordinated loan capital in order to give these enterprises a better chance of covering their financing needs through bank lending. As a result, Danica Pension, ATP and PensionDanmark have decided to inject at least one billion Danish kroner into a fund that will manage loan requests from SMEs.   
“Denmark is dependent on the progress of SMEs,” says CEO of Danske Bank Thomas F. Borgen, “and we are interested in involving ourselves to boost the growth and strength of the Danish business sector. With the new fund, we have united Danske Bank’s and the pension sector’s expertise and capital resources and have created a completely new loan product which is, moreover, commercially attractive to the parties behind the fund.”
Other banks and pension funds are welcome to join
The fund’s loans are targeted at companies with a DKK 50 million plus turnover and a borrowing need of DKK 10 million plus. The fund will be managed by the Capital Four asset management company, which will also perform an independent credit assessment of the enterprises applying for loan capital. Any enterprise in the SME category irrespective of its banking relations may apply for a loan.
Other pension funds are welcome to join the fund, which is expected to be in place and ready for loan disbursements before summer.
Reasonable returns to pension savers
CEO of ATP Carsten Stendevad is pleased that the fund will be able to help enterprises which for various reasons do not seek new equity with strengthening their capital base via this new form of subordinated loan capital.
“The fund gives Danish SMEs new access to subordinated loan capital, and it provides an interesting investment opportunity for us. We believe the investment will provide a reasonable return to ATP’s members,” says Carsten Stendevad, and goes on, “the fund represents a new and exciting cooperation model for the Danish financial sector.”
At PensionDanmark, CEO Torben Möger Pedersen is very satisfied with the new fund and has decided to join the fund because it supports the Danish business sector and at the same time is expected to provide a reasonable return in the current low yield environment.
“We are very pleased that we can do our part in providing Danish SMEs with new opportunities for obtaining loan capital,” says Torben Möger Pedersen. “This is very positive news for the Danish economy and the labour market, and it fits into our strategy of generating a reasonable return to our members.”
For interviews or further information, please contact
Kenni Leth, Danske Bank, telephone +45 51714368
Jens Christian Nielsen, Danica Pension, +45 25556396
Svend Aagaard, ATP, +45 21773379
Michael Carlsen, PensionDanmark, +45 29494685

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