Pbb issues second EUR 500m mortgage pfandbrief

Munich-based real estate lender pbb Deutsche Pfandbriefbank has issued a EUR 500 mln mortgage pfandbrief, marking its second such issue this year.

With more than 80 orders and a volume of more than EUR 1.3bn, it was strongly over-subscribed. The seven-year pfandbrief has a 2.125% coupon. Deutsche Pfandbriefbank will pay a 60 basis points spread over mid-swaps. Based on the re-offer price of 99.80%, the pfandbrief offers a yield of around 2.15%.

The issue was arranged by a syndicate comprising Crédit Agricole Corporate and Investment Bank, Commerzbank, Landesbank Baden-Württemberg and UniCredit.

Now, Deutsche Pfandbriefbank is mulling issuing a Jumbo Pfandbrief, ‘depending on investor demand and the market situation’, Andreas Schenk, head of treasury at Deutsche Pfandbriefbank, told PropertyEU. ‘The Pfandbrief market is starting to improve and I believe that it will continue to play an important role in the re-financing arena. Our target in terms of new Pfandbrief issues depends on our origination business. We need funding for new business. If we generate more business, we will issue more Pfandbriefe,’ he added.

In January, it placed a EUR 500 mln pfandbrief, which it tapped in March to EUR 675 mln, a Deutsche Pfandbriefbank spokesman told PropertyEU.

Nevertheless, it has not been all plain sailing for the bank this year. It announced on 24 May that its pre-tax profit more than halved in the first quarter to EUR 21 mln compared to a year earlier. The results were particularly affected by the costs for maintaining liquidity and a partial reduction of the public sector finance portfolio, the lender said.

The lender would also like to do between EUR 5bn and EUR 7bn in new business this year, Schenk said.

And there have been other Pfandbrief issuances this week: German lender Berlin Hyp placed a EUR 1bn mortgage Pfandbrief, the first Jumbo mortgage bond in Germany this year. An issue is considered Jumbo if the volume is EUR 1 bn or higher.