Specialist real estate bank Berlin Hyp, a subsidiary of German banking group LBBW, has reopened the covered bond market with its fifth Pfandbrief issue in the 2023 benchmark format.
The five-year bond with a volume of € 500 mln carries a coupon of 3.375% and is rated Aaa by the rating agency Moody's. The yield at reoffer was 3.394%.
The social bond, which backs the provision of social housing, represents the fourth ESG Pfandbrief issued by Berlin Hyp this year.
The syndicate banks mandated by Berlin Hyp included Commerzbank, HSBC, LBBW, Société Générale and UniCredit. Hauck Aufhäuser Lampe Privatbank acted as co-lead manager.
By the time of book closing, orders accumulated to around €1.6 bn, allowing the final reoffer spread to be fixed at mid-swap +6 basis points.
In total, 88 investors participated in the Social Pfandbrief. At 54%, the majority of the bond was placed in Germany.
Investors from abroad also showed considerable interest. 17% of the bond went to investors from the BeNeLux region, followed by the Nordic countries and UK with 11% and 10% respectively.
The largest investor group was made up of banks with 41%, funds 40% and insurance companies 8%. Savings banks and affiliated companies accounted for 21% of the issue.
Teresa Dreo-Tempsch, who leads capital market business on the board of management of Berlin Hyp, said: 'After publishing our social bond framework in 2022, we are very pleased that we have already been able to issue our third Social Pfandbrief in such a short time with a high investor demand.
'Social bonds are an integral part of our ESG funding strategy and allow us to address specifically one of the key social challenges, the provision of affordable housing. We would like to thank all parties involved.'
