COPENHAGEN Feb 5 The Danish government's
proposal to extend maturities for adjustable-rate bonds if
auctions fail does not fully eradicate refinancing risks for the
mortgage banks issuing the bonds, credit rating agency Standard
& Poor's (S&P) said.
The proposed changes alleviated S&P's immediate concerns
about the mortgage banks' refinancing risk, the agency said in a
note mailed to Reuters. "But they fall short of neutralizing the
risk from the banks' heavy reliance on short-term funding," it
S&P's opinion is important because the bill has been crafted
to, among other things, ease the credit rating agencies'
concerns about the Danish mortgage banks' large annual
refinancing auctions, which the agencies say put the mortgage
banks at risk should international debt markets freeze up.
(Reporting by Teis Jensen; Editing by Andrew Heavens)