There are 'signs of sweeping recovery' in the volumes of pfandbrief covered bonds being issued despite the financial market crisis, according to the Association of German Pfandbrief banks (VDP). A survey conducted by the VDP indicates that the aggregate volume for pfandbrief issuance in January this year was more than EUR 8 bn. Mortgage pfandbriefe and public pfandbriefe accounted for about EUR 4 bn.

There are 'signs of sweeping recovery' in the volumes of pfandbrief covered bonds being issued despite the financial market crisis, according to the Association of German Pfandbrief banks (VDP). A survey conducted by the VDP indicates that the aggregate volume for pfandbrief issuance in January this year was more than EUR 8 bn. Mortgage pfandbriefe and public pfandbriefe accounted for about EUR 4 bn.

Pfandbriefs are bonds covered by loans to public authorities, commercial or residential mortgage loans or ship loans. As at the mid-2008, outstanding volumes in pfandbriefs came to EUR 843 bn. The outstanding volume is about one quarter of all German bonds.

The associations said this compared to sales in December below the EUR 7 bn mark. The upward trend continued in the first calendar week of February whent the sales volume came to EUR 3.6 bn.

'The two large-volume pfandbriefs issued at the start of February - the first since late summer of last year - have been very well received by investors in Germany and abroad. This makes us optimistic about the rest of the year,' said Henning Rasche, president of the Association, in Frankfurt on Monday when the VDP met the press. 'Demand for German pfandbriefe, the benchmark product in the international covered bond market, is currently developing satisfactorily despite the wave of government-guaranteed bank bond issues. Our member institutions expect the positive trend of recent weeks to endure during the course of the year - provided the banking industry is stabilised further and investor confidence continues to strengthen,' Rasche said.