An investment in our Mortgage Funds is in the form of a Floating Rate Note, as the coupon will change with market rates. We do however not use a Libor rate (3m Stibor) as reference rate for our notes. Neither do we use a straight "pass through" rate model. This, we believe, bring advantages for our investors. Let us introduce you to Offered Market Rate, or simply OMR.

We calculate the average actual market rates on each maturity reflected in our portfolios at the current time. The average is based on what rates the seven largest lenders actually used during the previous months. These rates are published monthly, which allows us to calculate our index on a monthly basis. This also allows for monthly coupon payments.

OMR has several benefits for our investors. Below we list a few:

1. Independence. Investors do not rely on our originator's rate setting, but are pegged to developments in the broader mortgage market.

2. Transparency. Investors can track the published market rates and, if wanted, cross check our inputs and calculations.

3. Stickiness. As highlighted above, OMR will most likely prove to be more sticky, and less volatile, than interbank rates.

4. Asymmetry. Historically, banks have been quicker to raise mortgage rates when market rates go up than to lower them when market rates fall.