Pbb issues EUR 500m Pfandbrief

Pbb Deutsche Pfandbriefbank has issued a five-year EUR 500 mln mortgage Pfandbrief, a company spokesman confirmed to PropertyEU.

The Pfandbrief, which was quietly issued yesterday, follows the German lender's turnaround and re-entry into capital markets. 'After a successful restructuring of the company, it was our goal to also return to capital markets,' the spokesman said.

German investors accounted for almost 80% of interest, followed by Scandinavian investors with 13% and UK investors with 7%, according to the spokesman. Banks accounted for 67% of take-up, followed by funds with 24% and central banks with 6%.

The pricing at mid-swaps +68bp represented a new issue premium of approximately 15bps, compared to the issuer’s outstanding Pfandbrief benchmarks, which was in line with other new issues.

The issuance comes hot on the heels of a two-week roadshow designed to drum up support and which took in cities such as Frankfurt, Munich, Zurich, Vienna and Barcelona, as well as locations in France, the UK, Scandinavian and the Netherlands.

Now, further issuances are also on the cards: 'Funding needs are mainly driven by new business. Depending on the new business we originate and the market environment, further issues are possible. However, our comfortable liquidity position allows for a gradual re-entry into the markets,' the spokesman added.

Deutsche Pfandbriefbank, the core bank of the Hypo Real Estate Group, along with Eurohypo, is one of the biggest issuers of Pfandbriefe, or covered bonds in Germany. Last year, Deutsche Pfandbriefbank issued EUR 4.6 bn in new long-term funding, including private placements, unsecured funding and public sector Pfandbriefe.

Around EUR 47bn in Pfandbriefe were issued in the first six months of 2011, according to a spokesman for the Association of German Pfandbrief Banks (VDP). Of the total, roughly half - or EUR19.8 bn worth - took the form of jumbo bonds. The VDP expects total issuance this year to be around EUR 90 bn, slightly up on last year's EUR 87 bn.