The central government's lending facility applies to all government securities. Securities lending takes place against collateral in other Danish government securities.
Primary dealers in government bonds can borrow bonds for a period of up to 5 trading days. Similarly, primary dealers in T-bills can borrow T-bills for a period of up to 5 trading days. The fee is 0.2 per cent per year for both government bonds and T-bills with settlement the following day. In case of same day settlement, the fee is 0.3 per cent per year. The lending facility is available as buy-/sell-back transactions. Participants borrow in one buy-/sell-back transaction and lend (provide collateral) in another buy-/sell-back transaction. A haircut of 2.5 per cent is applied to each buy-/sell-back transaction. |