German lender Berlin Hyp has issued a €500 mln mortgage Pfandbrief, its first benchmark issue of the year, it announced on Thursday.
Orders of around €1.3 bn were generated from more than 50 investors, resulting in the bond being oversubscribed two-and-a-half times. As a result, lead managers priced the bond at mid-swap minus 10 basis points.
The lion’s share, or 61%, went to German investors, with Asian investors accounting for 12%, followed by orders from Scandinavia (8%) and Benelux countries (8%). Central banks and official institutions took 32% of the bond with lenders accounting for 30%. Savings banks and funds each took an additional 19%.
‘We were very confident with the Pfandbrief when we went to market yesterday,’ said Bodo Winkler, head of investor relations at Berlin Hyp. ‘We expect to issue three-to-four benchmark bonds this year of around €500 mln each, including the one we have just issued. This time, we had the most international audit book so far; we were very pleasantly surprised that so much interest came from international investors. A couple of years ago, German investors accounted for around 80% of interest.’
The capital raised will be used to refinance mortgage loans in Berlin Hyp’s cover pool, Winkler said. The eight-year bond has a coupon of 0.375% and is rated Aaa by rating agency Moody’s.
The mandated syndicate banks were UK lenders Barclays and HSBC as well as Germany’s BayernLB and Commerzbank and Italian lender UniCredit.
