Pbb Deutsche Pfandbriefbank has raised $600 mln (€550 mln) of funding on the pfandbrief market to continue to drive its new expansion into US lending.
The German bank placed the $600 mln in a three-year issue earlier this week which was oversubscribed, and which was priced at 55 basis points over the swap rate, an annual coupon of 2.25%.
Pbb resumed lending in the US last September and plans to open a representative office in New York, ideally by the end of this year. It lent €250 mln in total by the end of 2016 via participations in three transactions.
PropertyEU’s sister publication EuroProperty recently reported that the bank’s focus will initially be on gateway US cities such as Boston, New York and Washington DC. The bank has been free to decide its own strategy, including going to new markets, since its 2015 flotation which transferred it from German-government ownership.
Deputy chief executive Thomas Koentgen told EuroProperty: 'US margins are clearly more interesting than in most parts of Europe and definitely in Western Europe, starting at 200 basis points and sometimes significantly over 200 bps.'
It is thought that pbb would like to lend the equivalent of about €1 bn in the US in 2017.
The majority of investors in the new US$ pfandbrief issue were from Germany, followed by the Nordics and Central and Eastern Europe. The issue was managed by BayernLB, Citibank, Deutsche Bank, DZ Bank and Goldman Sachs.
This is not the first non-euro funding transaction for pbb this year: it has also issued a £300 mln mortgage pfandbrief and increased an existing US$ public-sector pfandbrief by $100 mln to $600 mln.
