Berlin Hyp AG
Gero Bergmann - Berlin Hyp
According to Gero Bergmann, member of Berlin Hyp’s management board with responsibility for capital markets “The Green Pfandbrief combines the best of both worlds. It is a mortgage Pfandbrief as defined in the Pfandbriefgesetz (Pfandbrief legislation) and therefore fulfils all the statute’s strict criteria. At the same time, it also has the formal structure for a green bond required by the Green Bond Principles.”
Property financing bank Berlin Hyp has become the first bank to issue a Green Pfandbrief bond after it placed a €500m seven-year mortgage Pfandbrief in benchmark format last week.
According to Gero Bergmann, member of Berlin Hyp’s management board with responsibility for capital markets “The Green Pfandbrief combines the best of both worlds. It is a mortgage Pfandbrief as defined in the Pfandbriefgesetz (Pfandbrief legislation) and therefore fulfils all the statute’s strict criteria. At the same time, it also has the formal structure for a green bond required by the Green Bond Principles.”
This means that the bond is underpinned by a lien on assets built “in accordance with strict ecological and sustainability criteria”.
A consortium comprising Credit Agricole, DZ Bank, JP Morgan, LBBW and UniCredit Bank placed the bond on the market with a coupon of 0.125%. At mid-swap, the re-offer spread was 16 basis points. The bond was oversubscribed four times with an order book of close to €2 bn. German investors accounted for 71% of buyers, followed by Scandinavia with 13% and Austria and Switzerland with 8%.
Another bank delighted with the response to its latest Pfandbrief issue was Hanover-based Deutsche Hypo, part of northern German landesbank Nord/LB. It said the benchmark issue of its €500m, seven-year mortgage Pfandbrief was also four times oversubscribed, again at a coupon of just 0.125%.
The cover stock of the Pfandbrief includes property loans to commercial clients with an asset focus in Germany, UK, the Netherlands, France and Poland.
With the order book only opened for 15 minutes, 70 acquisition orders with a volume of €2bn were registered, said Deutsche Hypo. According to Board member Andreas Pohl, “The impressively high demand for our first emission of the year mirrors the trust investors place in Deutsche Hypo,”
Investor demand was especially high from Germany, Austria and Switzerland at 86% of total orders registered. Other international demand came from the Benelux, UK, Asia and the Middle- East. Among investors were banks, central banks, savings banks and asset managers. The bond was placed by a consortium including BayernLB, Crédit Agricole CIB, Commerzbank, DZ Bank and Nord/LB as lead-manager, along with Bankhaus Lampe as co-lead.
Separately, the Association of Pfandbrief-issuing Banks in Germany (vdp) issued figures showing that the new real estate financing business underwritten by its members in 2014 rose by 6.3% to €17.7bn. This is made up of €52.8bn in residential financing (up 8.8% year on year), and €54.9bn in commercial property financing (up 4%). The market share of vdp member bank on total German commercial property financing was 57.2% by year-end, headed by Frankfurt-headquartered Helaba at €9.6bn, up 9% on 2013 on new business volume.
