(1)

In accordance with Article 18.1 of the Statute of the ESCB, national central banks of Member States that have adopted the euro (hereinafter the ‘NCBs’) and the European Central Bank (ECB) (hereinafter jointly the ‘Eurosystem central banks’) may operate in the financial markets by, among other things, buying and selling outright marketable instruments.

(2)

On 7 May 2009 and subsequently on 4 June 2009 the Governing Council decided that in view of the current exceptional circumstances prevailing in the market a programme (hereinafter the ‘covered bo nd purchase programme’ or the ‘programme’) should be initiated under which the NCBs and exceptionally the ECB in direct contact with counterparties may according to their allocated share purchase outright eligible covered bonds. The Eurosystem central banks intend to implement the covered bond purchase programme gradually, taking into account market conditions and the Eurosystem’s monetary policy needs. The objectives of these purchases are to contribute to: (a) promoting the ongoing decline in money market term rates; (b) easing funding conditions for credit institutions and enterprises; (c) encouraging credit institutions to maintain and expand their lending to clients; and (d) improving market liquidity in important segments of the private debt securities market.

(3)

As part of the single monetary policy, the outright purchase of eligible covered bonds by Eurosystem central banks under the programme should be implemented in a uniform manner, in accordance with the terms of this Decision,

1.

They shall be either (i) covered bonds issued in accordance with the criteria set out in Article 22(4) of the UCITS Directive (2) (hereinafter the ‘UCITS-compliant covered bonds’), or (ii) structured covered bonds that a Eurosystem central bank at its sole discretion considers as offering safeguards similar to UCITS-compliant covered bonds.

2.

Each covered bond issue shall, as a rule, have a minimum issue size of EUR 500 million. In special cases, a Eurosystem central bank may decide to purchase outright covered bonds with an issue size of below EUR 500 million, provided that the issue size is not below EUR 100 million, when this Eurosystem central bank decides at its sole discretion that specific market circumstances or risk management considerations require such purchase.

3.

The covered bond issue shall, as a rule, have a minimum rating of ‘AA’ or equivalent, awarded by at least one of the major rating agencies.

4.

If the issuer of the covered bond is an entity (other than a credit institution) incorporated in the euro area, the conditions shall be that (i) such an entity only issues covered bonds, and (ii) the covered bonds are guaranteed in a manner satisfactory to the relevant Eurosystem central bank by a credit institution incorporated in the euro area, or, alternatively, have safeguards of a similar nature that satisfy the requirements of the relevant Eurosystem central bank.

5.

The covered bonds shall be issued pursuant to legislation governing covered bonds that is in force in a euro area Member State. In the case of structured covered bonds, the law governing the documentation of the covered bonds shall be the law of a euro area Member State.