Berlin Hyp receives strong demand for 3rd Pfandbrief

German lender Berlin Hyp has launched its third mortgage Pfandbrief this year with the issue of a €500 mln five-year bond.

Berlin Hyp's syndicate banks Commerzbank, Deka, HSBC and UniCredit opened the order book on Thursday with an initial spread expectation of 8 basis points area below mid-swap. Bankhaus Lampe and WGZ Bank assumed the function of co-lead managers.

The order book reached over €1.2 bn from over 40 different investors and was closed an hour after opening, Berlin Hyp said in a statement. The bond was priced at 10 basis points below mid-swap and had an interest coupon of 0.125 %.

German investors received 88% of the Pfandbrief, followed by investors from Scandinavia and Switzerland, who accounted for 5% and 4% respectively. Banks and savings banks were the largest investor group, accounting for 51%.

'Although the issue volumes on the covered bond market in 2015 were higher than they have been for years, we once again generated strong demand with today's issue and attracted numerous investors for our bond in the present climate of sustained low interest rates,' commented Gero Bergmann, who is responsible for capital market business in Berlin Hyp's Board of Management.

The offering follows Berlin Hyp's first Green Pfandbrief in April with a volume of €500 mln and a term of seven years, and a three-year Pfandbrief issued in July for a further €500 mln.