Germany’s largest Pfandbrief issuer, Deutsche Pfandbriekbank, is ‘well positioned on credit and capital markets’ ahead of its IPO next week, according to its co-CEO Andreas Arndt, speaking at a teleconference in Munich on Wednesday.
Germany’s largest Pfandbrief issuer, Deutsche Pfandbriekbank, is ‘well positioned on credit and capital markets’ ahead of its IPO next week, according to its co-CEO Andreas Arndt, speaking at a teleconference in Munich on Wednesday.
‘We’ve received very positive feedback regarding the IPO so far,’ said Arndt. ‘Investors like our conservative risk-averse strategy. We’re well capitalized…and we have also benefitted from a very positive performance in recent years and hold a very good market position in Germany and in Europe overall.’
Pbb officially launched its flotation on Tuesday. In a press release, the German lender said that pbb’s owner, Hypo Real Estate Holding (HRE), had set the price range for pbb at between €10.75 and €12.75 per share. The offer period is expected to run from 8 July to 15 July.
Germany'sFederal Agency for Financial Market Stabilisation (FMSA), along with the syndicate banks, was also involved in setting the share price. The shares are being offered by subscription via public offers in Germany and Luxembourg as well as through private placements in other jurisdictions, including the US.
Pbb shares are expected to start trading on 16 July 2015.
The offer comprises a maximum of 75.1% of the share capital – or 100,990,956 ordinary bearer shares –as well as a greenshoe option of 4.9% of the share capital to cover a potential over-allotment. The German state and HRE will continue to hold an indirect stake of between 20% and 24.9% for a two-year
period. In addition, pbb has fully redeemed its €1 bn silent participation, as planned.
Citigroup Global Markets Ltd and Deutsche Bank have been mandated as joint global co-ordinators and joint bookrunners for pbb's flotation. JP Morgan Securities plc, Commerzbank AG and Joh. Berenberg, Gossler & Co. KG will act as additional joint bookrunners.
Pbb had a dramatic change of heart last month when it announced that it was abandoning its ‘dual track’ disposal process in favour of an IPO. The public announcement of the intention to float pbb followed resolutions passed on 10 June 2015 by the Extraordinary General Meetings of pbb and HRE, based on a positive vote by the Interministerial Steering Committee.
Pbb is fully-owned by state-owned HRE, which, in turn, is 100% owned by SoFFin, the Financial Market Stabilisation Fund set up by the German government following the collapse of Lehman Brothers in September 2008.
HRE is required to offload pbb by the end of this year in order to fulfill a condition imposed by the European Commission for its state bailout at the onset of the financial crisis. Pbb has already repaid ‘a sizeable chunk’ of the financial aid it received from the German government in 2009, Arndt said, speaking at the teleconference.