The Pfandbrief 2015 | 2016

Transcription

Facts and Figures about Europe’s Covered Bond Benchmark
Member Institutions of the vdp
The Association of German Pfandbrief Banks (vdp) currently represents
40 members. As the representative of its member institutions the vdp looks
after the interests of the Pfandbrief Banks vis-à-vis national and European
decision-making bodies as well as a broad professional public. Moreover, the
vdp in its capacity as the umbrella organization of the German Pfandbrief
Banks supports its members with highly specialized business solutions.
The expertise of the vdp is tailored to the specific requirements of Pfandbrief
Banks – the Pfandbrief and generation of eligible assets as cover. The vdp
promotes the economic concerns of its member institutions focusing on
lobbying activities in capital market and tax policy as well as in all other
political areas relevant to Pfandbrief issuing activity. In addition, it assists
its member institutions in regulatory issues and represents them vis-à-vis
the national supervisory bodies. Information and experience from member
institutions are exchanged, prepared and developed into market standards in
the Association’s bodies within the scope of group governance. In addition,
the vdp provides its members with business solutions that benefit the specific
lending and issuing business conducted by Pfandbrief Banks. The business
activities of the vdp members profit from the vdp’s recognized expertise, its
extensive network and well-established communications instruments.
Content
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The Pfandbrief – Background Information
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Jan Bettink | President of the Association of German Pfandbrief Banks
Preface
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The Legal Framework for Issuing Pfandbriefe
Jens Tolckmitt, Dr. Otmar Stöcker | Association of German Pfandbrief Banks
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CBPP3: The ECB’s third covered bond purchase programme
Ted Packmohr and Michael Weigerding, Commerzbank
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The Preferential Regulatory Treatment of the German Pfandbrief
RA Peter Scherer, LL.M. (I.U.), GSK Stockmann + Kollegen, Frankfurt am Main
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Capital Markets Union and Covered Bonds –
Key to Long-term Financing and Growth
Wolfgang Kälberer, Association of German Pfandbrief Banks
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Dr. Otmar Stöcker | Association of German Pfandbrief Banks
Harmonisation of covered bond legislation?
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Alfred Anner, Bayerische Landesbank
Rising Property Prices and the Implications for Pfandbriefe
Member Institutions of vdp
Aareal Bank | Wiesbaden
BayernLB | Munich
Berlin Hyp | Berlin
Bremer Landesbank | Bremen
Commerzbank | Frankfurt am Main
DekaBank | Frankfurt am Main
Deutsche Apotheker- und Ärztebank | Düsseldorf
Deutsche Genossenschafts-Hypothekenbank | Hamburg
Deutsche Hypothekenbank | Hanover
Deutsche Kreditbank | Berlin
Deutsche Pfandbriefbank | Unterschleißheim
Deutsche Postbank | Bonn
Dexia Kommunalbank | Berlin
Düsseldorfer Hypothekenbank | Düsseldorf
DVB Bank | Frankfurt am Main
Hamburger Sparkasse | Hamburg
HSH Nordbank | Hamburg
ING-DiBa | Frankfurt am Main
Kreissparkasse Köln | Cologne
Landesbank Baden-Württemberg | Stuttgart
Landesbank Berlin | Berlin
Landesbank Hessen-Thüringen (Helaba) | Frankfurt am Main
M. M. Warburg & CO Hypothekenbank | Hamburg
Münchener Hypothekenbank | Munich
National-Bank | Essen
Natixis | Frankfurt am Main
Nord/LB Norddeutsche Landesbank Girozentrale | Hannover
PSD Bank Nürnberg | Nuernberg
SaarLB Landesbank Saar | Saarbrücken
Santander Consumer Bank | Mönchengladbach
SEB | Frankfurt am Main
Sparkasse KölnBonn | Cologne
UniCredit Bank HypoVereinsbank | Munich
Valovis Bank | Essen
WL BANK Westfälische Landschaft Bodenkreditbank | Münster
Wüstenrot Bank Pfandbriefbank | Ludwigsburg
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Further Information
92 Other Pfandbrief Issuers 93 Topics covered in 1996 – 2014
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Preface
Dear Reader,

You have before you the 20th edition of the Pfandbrief Fact Book. Since this publication first
appeared in 1996, we have examined “Germany’s largest private bond market” in over 100
specialist articles and presented it in the context of current developments. These 20 annual
publications closely trace the vibrancy of this market and how it has constantly evolved over
the years.
The market’s momentum was clearly visible in the first half of 2015, too, when the Pfandbrief
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proved that it remains one of the sought-after bonds in the capital market. Spurred in part by
the rise in demand created by the third purchase program of the European Central Bank (ECB),
issuers sold Pfandbriefe worth close to € 28 billion in the primary market. That is over onethird (+37%) more than in the corresponding period last year. Issuers also took advantage of
the boost from the ECB in the benchmark segment in the first six months of this year. Through
22 transactions, including add-ons, in the total amount of € 11.75 billion, more benchmark
Pfandbriefe were brought to market in Germany than in any other country in Europe. And this
despite the fact that the primary market for benchmark issues was closed before the end of the
first half-year due to the developments surrounding Greece and the question as to whether it
would remain part of the Eurozone.
In this Pfandbrief Fact Book, we examine the medium- and long-term implications of the ECB’s
Covered Bond Purchase Programme 3 (CBPP3) given the important part it has played in recent
market developments. This “anniversary edition” begins, like all our fact books, with an article
on the legal framework for issuing Pfandbriefe, this time based on the Pfandbrief Act amendment which entered into force last winter. A separate article assesses recent price developments on the German real estate market and what they mean for Pfandbrief investors. However, the main focus this year is again on a subject that preoccupied the covered bond sector
intensely in previous years and will continue to have a crucial impact in the future: regulation.
Our authors dedicate two articles to the preferential treatment given to and the harmonization
of Pfandbriefe/covered bonds.
The possibility of a harmonization of covered bonds has been on the Pfandbrief issuers’
agenda since, at the latest, the Green Paper on long-term financing was published two years
ago. The European banking union that was launched in November 2014 has given Brussels
Jan Bettink | president
additional stimulus to push ahead with the integration of the covered bond markets. In spring
of this year, the European Commission fleshed out its objective to increase the efficiency of
Europe’s capital markets in its Green Paper on building a capital markets union. A separate
consultation process for covered bonds was originally planned to get underway by the end
of 2014, but was then postponed until summer 2015. In the meantime, there are signs that
the consultation paper will largely take its bearings from the Best Practice Recommendations published by the European Banking Authority (EBA) in early summer 2014. Moreover,
key aspects of the proposed harmonization are likely to touch upon the four core areas which
the Association of German Pfandbrief Banks (vdp) has also identified: suitable cover assets,
the definition of special public supervision, the ring-fencing of the cover pools in the event of
insolvency, and uniform standards of transparency. The degree to which harmonization is
to take place still seems to be open for discussion, however. The vdp remains committed to
minimum harmonization which will allow the national covered bond systems in Europe to
continue to exist and develop.
Dear Reader, in the year 2015 the Pfandbrief and the Pfandbrief market are still in good
health. Nevertheless, there will be challenges to meet in the years ahead, particularly with
regard to regulation. With that in mind, I hope you enjoy reading this, our anniversary edition,
and that its contents provide some valuable insights and perspectives for future debate.
Our special thanks go to the authors, without whose time and hard work this new issue of
the Pfandbrief Fact Book would not have been possible.
Yours sincerely,
Jan Bettink
President of the Association of German Pfandbrief Banks
berlin, august 2015
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The Legal Framework
for Issuing Pfandbriefe
Jens Tolckmitt, Dr. Otmar Stöcker | Association of German Pfandbrief Banks
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Pfandbriefe are covered interest-bearing bonds. They are issued by
credit institutions with a license to engage in Pfandbrief business (Pfandbrief Banks) and placed on the capital market. These credit institutions
use them to fund certain loans that are secured by real estate liens, ship
mortgages, aircraft mortgages and claims against public-sector bodies.
Depending on the type of collateralization, these bonds are referred
to as Mortgage Pfandbriefe, Ship Pfandbriefe, Aircraft Pfandbriefe or
Public Pfandbriefe respectively. Most Pfandbriefe are issued in the
form of bearer bonds, followed by registered bonds.
Structure of a Pfandbrief Bank
General supervision based on the German Banking Act (KWG)

Other banking activities

not eligible as cover
Other funding

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Special supervision of Pfandbrief Banks
on the basis of the Pfandbrief Act (PfandBG)

Mortgage loans
– commercial
– residential
Public-sector loans
KWG
Ship finance
Aircraft finance
PfandBG

60 % of
the mortgage
lending value

100 %
of the loans

60 % of
the mortgage
lending value
Ship Pfandbrief

60 % of
the mortgage
lending value
Aircraft Pfandbrief
Mortgage Pfandbrief
Public Pfandbrief



KWG


PfandBG
Cover pool monitor audits cover assets
The Pfandbrief Bank grants property finance, ship loans, aircraft loans and public-sector loans. These
assets are reported in the credit institution’s balance sheet. The cover pool monitor enters loans or parts
of loans that are eligible as cover under the Pfandbrief Act into the respective cover register – together
with the collateral for them – which the cover pool monitor watches over. A separate register is maintained for each loan type. In their entirety, the cover assets entered in one cover register are referred to
as the cover pool. Pfandbriefe are issued on the basis of the cover pools. The Pfandbrief Bank undertakes
to pay the Pfandbrief bearers the promised interest and, at maturity, to repay the principal amount of the
Pfandbrief. In the event of the Pfandbrief Bank’s insolvency, the Pfandbrief bearers have a preferential
claim in respect of the assets entered in the cover registers. The cover pools and the Pfandbriefe are not
included in the insolvency proceedings under the insolvency administrator, but are managed separately
by the cover pool administrator.
The legal basis for issuing Pfandbriefe is the Pfandbrief Act (Pfandbriefgesetz, PfandBG), the
purpose of which is to ensure the Pfandbrief’s high standard of safety. On the one hand, this
piece of legislation serves to satisfy the demand by certain circles of investors for a secure
investment. On the other, thanks to the low risk premiums to be paid, Pfandbriefe provide
issuers with a very cheap and reliable source of funding. This in turn enables the issuers to
supply the credit market with loans on a continuous basis at prices that take their bearings
from the capital market.
The high standard of safety the Pfandbrief offers is owed to the provisions of the Pfandbrief Act and to the regulations issued in connection with the Pfandbrief Act, the main elements of which are as follows.
Supervision
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Granting the License
Pfandbrief business, which is to say the issuing of covered bonds on the basis of real estate
mortgages, ship mortgages and aircraft mortgages as well as claims acquired against the public sector, is a line of banking business. To be awarded a license to engage in Pfandbrief business, a credit institution must fulfill special requirements. For example, it must have core capital of at least € 25 million and be licensed to conduct lending operations within the meaning
of the German Banking Law (Kreditwesengesetz, KWG). Moreover, the credit institution must
have at its disposal suitable procedures and instruments for managing the risk entailed in
the cover pools on the one hand and its issuing operations on the other,
prove that it intends to engage in Pfandbrief business on a regular and sustained basis,
and
put the appropriate organizational structure and resources into place.
In stipulating these special conditions for the granting of a license, legislators seek to ensure
that each credit institution conducts its Pfandbrief business seriously and in a sustained manner by linking the assumption of Pfandbrief business with substantial effort on the bank’s part.
This is intended to make it more difficult to engage in opportunistic, short-term business strategies.
Because a Pfandbrief Bank needs a separate license for each of the Pfandbrief categories,
it must prove it has the requisite expertise in the various operations eligible as Pfandbrief
cover.
Under the 2010 amendment, a highly significant new provision was included in § 2 par. 4
of the Pfandbrief Act, whereby the Pfandbrief Bank is to retain its banking license in respect of
the cover pools, even if it is revoked for the remainder of the bank (for further details, see the
section “Separation Principle in the Event of the Pfandbrief Bank’s Insolvency”, p. 18 ff.).
Permanent Supervision and Cover Audits
In addition to general banking supervision, a Pfandbrief Bank is subject to a special form of
supervision by the Federal Financial Supervisory Authority (BaFin), the aim of which is to
monitor observance of the Pfandbrief Act and the regulations issued in connection with it. The
permanent supervision is conducted by the department at BaFin responsible for the respective
credit institution. The prerequisite for the Pfandbrief market to function effectively is the highest and the most uniform standard of safety possible, across all issuers. For this reason, the
special supervision of Pfandbrief Banks must be conducted according to uniform principles.
The “Pfandbrief Competence Center – Basic Issues and Cover Audits at Pfandbrief Banks”
was set up at BaFin to ensure the uniform application and interpretation of the Pfandbrief Act.
Besides the ongoing supervision, a further feature is the cover audits, which are performed at
regular intervals of, usually, two years. Their purpose is to examine the cover pool assets by
way of random checks, and they are conducted or monitored by the “Pfandbrief Competence
Center” at BaFin to make sure that uniform standards and requirements are complied with.
The 2014 amendment to the Pfandbrief Act laid the foundations for an additional Pfandbrief reporting system whose purpose is to cover the financial position of the cover pools. This
ensures that BaFin has the authority and the skills it needs, also in the event that a Pfandbrief
bank is subject to supervision by the ECB. The details of this new reporting system still have to
be set out in a separate regulation.
In keeping with the supervisory authority’s powers to demand a higher level of capital
(capital add-on), BaFin can, moreover, impose a “cover add-on”. This represents a valuable
addition to the current 2 % minimum over-collateralization. For each cover pool, BaFin will
then separately examine whether the statutory minimum over-collateralization of 2 % appears
sufficient; if not, it can then use an administrative act to stipulate additional cover. Such examinations and stipulations would have to take place on a regular basis, within the framework of
specific supervision relating to Pfandbriefe and cover pools.
Cover Pool Monitor
Cover pool monitors are to be appointed at every Pfandbrief Bank. Their task is to see to it
that the statutory cover for the Pfandbriefe is given and that the cover assets are duly entered
in the respective cover register. Appointed by BaFin, cover pool monitors are not answerable
to the bank, the supervisory authority or the Pfandbrief creditors. The function they perform
is shaped solely by law. BaFin may revoke the appointment for an objective reason. Thus, the
cover pool monitor may be regarded as an independent monitoring body.
Under the 2010 Pfandbrief Act amendment the liability of the cover pool monitor was
restricted, in the event of gross negligence, which cannot be precluded or limited by way of
a contract, to € 1 million (§ 7 par. 5 sentences 2 and 3 Pfandbrief Act. For the first time, this
enables the cover pool monitor to take out insurance in respect of his duties.
Quality of the Cover Assets
Not all the loans a Pfandbrief Bank extends are eligible as cover for Pfandbriefe. The Pfandbrief Act expressly stipulates which loans and other claims may serve as cover assets. In this
context a distinction is, as a rule, made between the individual Pfandbrief types.
Mortgages as Cover Assets
Only mortgages that meet certain requirements may be used as cover for Mortgage Pfandbriefe. Land charges and foreign security interests that offer comparable security rank equal
with mortgages.
The property charges may encumber landed property or equivalent titles to land in Germany, in the Member States of the European Union or another Contracting State to the Agreement on the European Economic Area (EEA), in Switzerland, in the USA, in Canada or in
Japan; under the 2014 Pfandbrief Act amendment, Australia, New Zealand and Singapore were
included in the group of countries. Both commercial and residential properties may be lent
against. Also eligible as cover for Pfandbriefe are assets which other credit institutions hold for
the Pfandbrief Bank on a fiduciary basis, provided the Pfandbrief Bank is entitled to the sepa-
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ration of these assets from the trustee’s assets in the event of the latter’s insolvency. In order
to support securitization and Pfandbrief business, rules were created in 2005 with the Funding Register Law (Refinanzierungsregisterverordnung) under the German Banking Act which
ensure the insolvency remoteness of land charges held on a fiduciary basis.
For the Pfandbrief Banks’ cross-border business that is eligible as cover, moreover, the
share of the loans in respect of which the preferential right in insolvency is not ensured must
not exceed 10 % of the mortgage cover assets. The EU Member States are not included in the
Pfandbrief Bank’s cross-border business in this context, as the preferential right in the case
of insolvency is ensured by statutory provisions at EU level.
Mortgage lending value vs. market value
Value

Market value
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Mortgage lending value
60 % mortgage lending limit

Time
Conservative valuation of real estate
The mortgage lending value (MLV) is determined according to detailed statutory provisions
Based on permanent features of the property
Market value is the upper limit for the MLV
Occasion-related review of the MLV
Claims up to 60 % of the MLV are eligible as cover
One of the central pillars of the safety of the Mortgage Pfandbrief is that property financings
may be included in cover only up to the mortgage lending limit of 60 % of the mortgage
lending value (MLV). The way in which the MLV is to be determined, and the requirements in
respect of the valuer’s qualifications and the valuer’s independence vis-à-vis the Pfandbrief
Bank are regulated in detail by the Pfandbrief Act and the Regulation on the Determination
of the Mortgage Lending Value (BelWertV). The MLV reflects only the long-term, sustainable
aspects of a property, meaning that speculative aspects are disregarded. The aim here is that
the MLV, unlike the market value, shows as little in the way of fluctuation as possible. The
MLV must not exceed, and indeed is usually lower than, the market value. However, the
difference between the two values does not remain constant, for which reason it is not possible to make a simple value deduction. Instead, the difference is determined by the expectations of the market with respect to the future price development of the property in question.
Yet the mortgage lending limit of 60 % of the MLV does not mean that a loan, to be eligible as
cover, may only be equivalent to this 60 % limit. Only the part of the loan that serves as cover
may not exceed this limit. This can be achieved by dividing the loan into two parts – one up
to the 60% limit and the other above it. However, this is not necessary in practice as an ideal
division is possible and is applied in most cases.
Finally, the properties lent against must be insured against the risks relevant to the location
and type of property concerned.
Claims against Public-Sector Entities as Cover Assets
Under § 20 Pfandbrief Act, money claims resulting from the granting of loans, from bonds or
from a comparable legal transaction may serve as cover for Public Pfandbriefe. In particular,
debtors in this respect may be
EU Member States, Contracting States to the Agreement on the EEA and their sub-sovereign bodies (local authorities and regional governments)
the so-called third states (Switzerland, Japan, Canada and USA) and their sub-sovereign
bodies, provided they are assigned to credit quality step 1;
German public-sector authorities for which state support (“Anstaltslast”) or a legally
founded obligation (“Gewährträgerhaftung”) or a state refinancing guarantee has been
given, or which are legally entitled to raise fees, rates and other levies;
so-called public-sector entities of an EU or EEA Member State; public-sector entities of a
third state provided they are assigned to credit quality step 1;
export credit agencies (ECAs) domiciled in an EU/EEA Member State provided the agency
meets the requirements to be fulfilled by a “public-sector entity” as defined in Art. 4 (8) of
the Capital Requirements Regulation (CRR) (575/2013); following the 2014 Pfandbrief Act
amendment, the geographical scope of application of the group with regard to sovereign
guarantees has been brought into line with those with regard to direct claims against the
sovereign (§ 20, par. 1 sent. 1 no. 2 Pfandbrief Act), so that ECAs from eligible third states
may also qualify as guarantors;
the European Central Bank as well as multilateral development banks and international
organizations within the meaning of the CRR (575/2013) (quality step 1 required);
the central banks of the above EU Member States which meet cover eligibility criteria as
well as – to a limited extent – suitable credit institutions of credit quality step 1 which are
domiciled in a state which meets cover eligibility criteria in accordance with § 20 Pfandbrief Act.
Under the rules set forth in the EU CRR (575/2013), credit quality step 1 is the highest quality
category with regard to capital adequacy; this in turn has an effect on the favorable weighting
given to the Pfandbrief.
As from July 2005, claims against public-sector credit institutions for which no legally
founded obligation or only modified state support exists are no longer eligible as cover. In
particular, this concerns savings banks and Landesbanken. However, they may be included in
cover to a limited extent as claims against credit institutions. Claims against the above debtors
remain eligible as cover if, under the agreement between the German Federal Government and
the European Commission of March 22, 2002, they continue to be state-guaranteed (grandfathering).
Also in the case of claims against public-sector bodies, as with mortgage claims, the 10 %
limit applies to claims against debtors from third states in which the Pfandbrief creditors’ preferential right in insolvency is not ensured.
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Ship Mortgages as Cover Assets
Certain ship mortgages may be included in cover for Ship Pfandbriefe (§ 21 Pfandbrief Act).
The ships and ships under construction that are lent against must be recorded in a public
register. The ships must not be more than 20 years old. Loans against ships, like loans against
properties, may be included in cover only up to the equivalent of 60 % of the ship’s MLV. The
MLV, which is also a permanent value, must be determined according to the principles of the
Regulation on the Determination of the Mortgage Lending Values of Ships and Ships under
Construction (“Schiffsbeleihungswertermittlungsverordnung”). Special requirements apply
to the eligibility of ship mortgages as cover, such as maximum lives for ship mortgages. The
share of loans outside the EU in the case of which the preferential right in insolvency is not
ensured may not exceed 20 % for Ship Pfandbriefe. This takes into consideration the fact that
ships are often registered abroad, and a 10 % limit would unreasonably restrict the use of the
Pfandbrief for credit institutions – and with that, their competitiveness.
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Aircraft Pfandbriefe
The introduction of § 26a-26f under the 2009 amendment of the Pfandbrief Act is an important new aspect for business qualifying as cover for Pfandbriefe in that loan receivables
secured by aircraft mortgages are eligible as cover for a new Pfandbrief category, the “Aircraft
Pfandbrief”. As is the case with Mortgage Pfandbriefe, Public Pfandbriefe and Ship Pfandbriefe, a separate cover pool is set up for Aircraft Pfandbriefe. As a security interest, the registered lien in respect of an aircraft is of the same high quality and level of reliability as the ship
mortgage. The secondary markets for aircraft are liquid and efficient, so that the realization of
aircraft is assured. Modeled closely on the rules governing cover assets for Ship Pfandbriefe,
the law sets stringent standards both with regard to the collateralization of the loans and to
the valuation of the individual aircraft. Thus, the Aircraft Pfandbrief, too, offers the same high
level of protection afforded German Pfandbrief creditors.
Claims against Credit Institutions
Claims against suitable credit institutions may serve as further cover assets for all four Pfandbrief types. This serves the purpose of enhancing the cover pool liquidity. The cover pools
are made up of a large number of assets with different lives, interest rates and currencies.
The lives, coupons and currencies of the Pfandbriefe cannot match exactly those of the cover
pools. Usually, for example, Pfandbrief issues are of a greater volume than the underlying
assets. To balance out these mismatchings it is necessary to be able to include liquid and flexible assets such as claims against credit institutions in the cover pools. Since the basic features
of the cover pools should not, however, be changed, claims against credit institutions may
account for only up to 10 % of the total volume of each Pfandbrief type. Furthermore, claims
against one credit institution are limited to 2 % of the Pfandbriefe.
The 2009 amendment brought with it a change to § 4 par. 1 sent. 2 no. 3 Pfandbrief Act in
that the credit quality step 1 was introduced for claims against credit institutions as a qualityenhancing criterion. Further, the eligibility as cover of such claims against credit institutions
is restricted to credit institutions in countries which generally speaking belong to the circle of
eligible countries. It was made clear, moreover, that loans with a subordination agreement are
not eligible as cover. These restrictions apply through the provisions set forth in § 19 par. 1
no. 2, § 20 par. 2 no. 2, § 26 par. 1 no. 3 and § 26f par. 1 no. 3 Pfandbrief Act to all Pfandbrief
types, as these provisions refer in this context to § 4 par. 1 sent. 2 no. 3 Pfandbrief Act.
Claims Resulting from Derivative Contracts
Subject to certain conditions, claims resulting from standardized master agreements in respect
of derivative transactions against suitable credit institutions, financial services institutions,
insurers and central counterparties at a stock exchange, at the German Federal Government
and with Federal States (“Bundesländer”) may be eligible as cover for all Pfandbrief types
(§ 19 par. 1 no. 4, § 20 par. 2 no. 3, § 26 par. 1 no. 5 and § 26f par. 1 no. 5 Pfandbrief Act).
The natural mismatch (above) between cover pools and Pfandbriefe can give rise to interest rate and currency risks in the cover pools. These risks can be neutralized by offsetting
assets, or by derivatives (interest rate and currency swaps) concluded between the Pfandbrief
Bank and the derivative counterparty. The net present value of derivatives may change in the
short term, depending on how interest and exchange rates develop. A positive value from the
Pfandbrief Bank’s viewpoint gives rise to a claim on the part of the Pfandbrief Bank against the
counterparty. A negative value means the Pfandbrief Bank has a liability towards the derivative
counterparty which, however, is not payable until the derivative contract is terminated. Claims
and liabilities are netted against each other on a daily basis. The standardized agreements
used in practice for derivatives provide that, in the event of insolvency, either party may terminate the contract vis-à-vis the other with immediate effect. In consequence, the derivatives
concluded under the master agreement are settled at their net present value and the resultant
claims to which the parties are entitled are offset against each other to establish the net claim.
Such a consequence would not, however, be consistent with the Pfandbrief safety concept,
under which Pfandbriefe outstanding may not become payable prematurely – even in the event
of the Pfandbrief Bank’s insolvency – but are to be satisfied out of the payment flows from
the cover assets when they mature (see “Separation Principle in the Event of the Pfandbrief
Bank’s Insolvency”, p. 18). In the event of the Pfandbrief Bank’s insolvency, if the counterparty
were able to terminate the derivatives concluded in order to hedge against interest rate and
currency risks, the cover pools would be exposed to these risks. For this reason, it is both
necessary and required by law that derivatives included in cover may not be terminated by
the counterparty if the Pfandbrief Bank becomes insolvent. To achieve this in practice, individual agreements are concluded under a master agreement and derivatives are allocated
to the respective individual agreements. For example, if a Pfandbrief Bank issues Mortgage
Pfandbriefe and Public Pfandbriefe, three individual agreements may be concluded: one each
for the derivatives pertaining to the respective cover pool, and one which covers the remaining assets of the Pfandbrief Bank. Netting takes place only among the derivative claims that
fall under the same individual agreement. In the event of the Pfandbrief Bank’s insolvency,
therefore, only the individual agreement concluded with the counterparty for the other assets
of the Pfandbrief Bank can be terminated. The individual agreements for the cover pools, on
the other hand, must remain in force, and could only be terminated if the respective cover pool
also became insolvent.
The individual derivatives are entered in the respective cover registers. Derivatives may
have a negative value, giving rise to liabilities in respect of the cover pool. As a concession for
the fact that the counterparties have to waive their right to terminate the derivative contracts,
even if the Pfandbrief Bank becomes insolvent, their claims rank equal with those of Pfandbrief
creditors. To prevent the cover pools from becoming inordinately volatile and in order not to
undermine the principle behind the cover pools, the claim or the liability under the net derivative position in each cover pool may not exceed – calculated in terms of the net present value
-12 % both of the cover assets and of the Pfandbriefe outstanding.
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Cover Register
The above-mentioned cover assets must be entered in cover registers (§ 5 Pfandbrief Act).
A separate register is to be maintained for each Pfandbrief type. The entry of derivatives is
subject to approval by the derivative counterparty and the cover pool monitor. This requirement reflects the above-mentioned special aspects regarding derivatives as cover assets.
The cover registers, which may also be kept electronically, must be passed on to BaFin at
regular intervals, where they are stored.
Cover registers are, of course, highly important. All the assets recorded in one cover register belong to the respective cover pool and are, in the event of the Pfandbrief Bank becoming insolvent, subject to the cover pool administrator’s right of management and disposition.
Details on the maintenance of the cover registers are set forth in the Cover Register Statutory
Order (Deckungsregisterverordnung).
Active Administration of the Cover Pools to Ensure Matching Cover
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The cornerstone of the safety of the Pfandbrief is the fact that the Pfandbrief creditors’ entitlement against the Pfandbrief Bank to payment is secured by the cover pools which, in the event
of the Pfandbrief Bank’s insolvency, are to serve primarily to satisfy the Pfandbrief creditors’
claims. Thus it is essential that, should insolvency occur, the cover pools contain sufficient
cover assets to satisfy the Pfandbrief creditors’ claims punctually. This is achieved, first of all,
in that the nominal value and the net present value of the Pfandbriefe outstanding are covered
at all times by matching cover pools (§ 4 Pfandbrief Act).
The Net Present Value Regulation (Barwertverordnung) stipulates in detail how the net
present value is determined, and permits three methods for calculating the net present value.
These methods use different fictitious changes of interest rates and exchange rates which are
to be taken into account when determining the net present value. The cover pools are subjected to defined stress scenarios, so that in effect a net present value cover surplus results.
Moreover, excess cover must be maintained in net present value terms which amounts to 2 %
of the Pfandbrief liabilities to be covered, and which must be invested in particularly liquid
assets. The purpose of this mandatory overcollateralization is, in the event of the Pfandbrief
Bank’s insolvency, to cover risks that may arise as well as administrative expenses payable,
and to meet liquidity management costs. Over and above this, it is at the issuer’s discretion to
maintain further excess cover. Most rating agencies stipulate this as a precondition for awarding top ratings to Pfandbriefe.
Unlike those for Mortgage Backed Securities, cover pools for Pfandbriefe are dynamic. This
means their composition changes over time, depending on the maturities and the assets that
are newly registered and included in cover. Loans are repaid or are removed from the cover
for other reasons, to be replaced by new loans, and new lending is included in cover to enable
the Pfandbrief Bank to issue new Pfandbriefe. Thus, the cover pools have to be actively administered to assure matching cover at all times. The Pfandbrief Act stipulates that risk manage-
ment systems must be installed to identify, assess, control and monitor the relevant risks such
as counterparty risks, interest rate, currency and other market price risks, operational risks
and liquidity risks (§ 27 Pfandbrief Act).
§ 27 of the Pfandbrief Act covers the general handling of different risks inherent to the
cover pools. Whereas specific limits are stipulated for interest rate, currency and credit risks,
the liquidity risk had originally not been explicitly addressed. Liquidity risk is defined here as
the risk that, in the event of the Pfandbrief Bank’s insolvency, the cover pool will be unable to
provide sufficient liquidity to ensure the timely servicing of the Pfandbriefe maturing in the
months to follow, e.g. large-volume Jumbo Pfandbriefe. Rating agencies and investors saw in
the absence of a provision dealing explicitly with this possibility a weakness in the Pfandbrief
Act, occasioning rating agencies to call for excess overcollateralization to cover this liquidity
risk.
Against this background, under the 2009 amendment a new provision to limit the shortterm liquidity risk was added (§ 4 par. 1a Pfandbrief Act). Accordingly, the maximum cumulated liquidity need of the next 180 days1) must be secured by assets that can be used as excess
overcollateralization, as well as other liquid cover assets. Liquid assets are considered to be all
the financial instruments entered in the cover register which the European System of Central
Banks (ESCB) has classified as being eligible for central bank credit (ECB-eligible assets). Various limits do not apply to such assets that are entered in the cover register solely to manage
liquidity.
Transparency of the Cover Pools
To give investors as exact and up-to-date a picture as possible of the composition of the cover
pools and the Pfandbriefe outstanding, Pfandbrief Banks are required to publish certain
information on a quarterly basis and additional data annually. Such information includes, for
instance, the regional distribution of the cover assets, the type of properties lent against, the
debtors of public-sector liabilities and the amount of claims that are at least 90 days in arrears.
This allows Pfandbrief creditors to compare the cover pools of different Pfandbrief Banks. The
2010 amendment of the Pfandbrief Act provided for a period of one month after the end of
each quarter. The quarterly report must be published within this one-month period; this period
will be extended to two months for the fourth quarter.
The draft law originally provided for a liquidity buffer of 90 days (Bundesrat printed paper 16/11130 of December 1, 2008, p. 30). Because, during the course of the financial crisis, this was considered too short the Bundestag followed the proposal made by the
Central Credit Committee of the Leading Associations of the German Credit Industry (ZKA) and increased this reserve to 180 days.
1)
15
Separation Principle in the Event of the Pfandbrief Bank’s Insolvency
A key component of the safeguarding mechanisms enshrined in the Pfandbrief Act are the
provisions contained in § 30 ff. Pfandbrief Act, which regulate what happens to the cover
pools and Pfandbriefe in the event of the issuer’s insolvency. Under this preferential right the
cover pools are at the disposal in the first instance of the Pfandbrief creditors and, under certain circumstances, of the derivative creditors in the event of the Pfandbrief Bank becoming
insolvent, to satisfy their claims. This means that the Pfandbrief Bank’s insolvency does not
affect them. To ensure this preferential right, the Pfandbrief Act provides for an “emergency
plan” that is set forth in detail. This is also to apply if, under the German Restructuring Act, a
bridge bank is involved (§ 36a Pfandbrief Act).
Insolvency Privilege of Pfandbrief Holders

Insolvency
of the Issuer
Pfandbrief Bank
Insolvency
Administrator
Other assets
Creditors
Other Creditors
16
Other Assets
Cover Pool
Administrator
Mortgage
Loans
Mortgage loans
Mortgage Pfandbrief
Claims against
Public-SectorDebtors
Claims against
Public-SectorDebtors
Public Pfandbriefe
e
Each is
Pfandbrief
Bank with
limited
Ship Mortgages
Ship Mortgages
Ship Pfandbriefe
Aircraft
Mortgages
Aircraft Mortgages
Separation principle in the event of a Pfandbrief Bank’s insolvency
no acceleration of Pfandbrief
Pfandbrief and cover assets do not fall into the insolvency estate
Pfandbrief Bank with limited business activities
Cover pool administrator manages cover assets
business
activities
Ring-Fencing of the Cover Pools
The cover pools do not participate in the insolvency proceedings in respect of the bank’s
assets. They form for each Pfandbrief category issued by the credit institution a special (ringfenced) part of the Pfandbrief Bank out of which the Pfandbrief creditors’ claims are to be
satisfied, (§ 30 par. 1 Pfandbrief Act). The bank’s insolvency administrator therefore has no
access to the cover pools and the Pfandbriefe do not accelerate. With regard to mortgage
loans, which are in part included in the cover pools and are in part outside the cover pools, the
Pfandbrief Act pro-vides that the payment flows from these loans first pass in full to the cover
pool administrator (see below). The insolvency administrator can demand that the payment
flows be separated at his expense, and that the payments in respect of the parts of the loans
above the cover limit flow to him.
Pfandbrief Bank with Limited Business Activities
One question repeatedly asked concerns the legal nature of the cover pools in the event of a
Pfandbrief bank’s insolvency. The answer sometimes given is that the cover pool is separated
from the insolvency estate for insolvency law purposes and given the term “Sondervemögen”.
This, in turn, is often misunderstood to the effect that the cover pool becomes a SPV, so that
the character of a bank (and therefore the banking license) is lost.
In 2009, the German Federal Government, during a so-called small parliamentary interpellation, cleared up this misconception. In its reply (Bundestag printed paper 16/13823 of July
21, 2009, no. 2) the government describes the term “Sondervermögen” as unsuitable and
instead uses the expression “besonderer Teil der Pfandbriefbank” (special part of the Pfandbrief Bank) to convey the fact that the cover assets and Pfandbriefe administered by the cover
pool administrator together constitute a part of the bank’s assets in its own right.
The 2010 amendment of the Pfandbrief Act developed this legal notion further in that
the explanatory memorandum to the bill (Bundesrat printed paper 155/10 of March 26, 2010,
p. 76f) clearly states that, in the event of a Pfandbrief Bank’s insolvency, a cover pool does
not constitute a legal entity but remains a special part of the Pfandbrief bank for which the
term “Pfandbrief bank with limited business activities” (“Pfandbriefbank mit beschränkter
Geschäftstätigkeit”) is to be used – separately for each Pfandbrief category. Moreover, it
is to be stipulated under the new § 2 par. 4 Pfandbrief Act that the banking license will be
retained for the cover funds, even if it is revoked for the rest of the bank.
Cover Pool Administrator
When insolvency proceedings are initiated in respect of the bank’s assets, the court at the Pfandbrief Bank’s seat appoints one or more cover pool administrators at the request of the supervisory authority (§ 30 par. 2 Pfandbrief Act). Cover pool administrators may also be appointed
before insolvency proceedings are initiated if the bank’s imminent insolvency is to be feared and
such action is necessary to protect the Pfandbrief creditors. The cover pool administrator is a
natural person. He has the right to manage and dispose of the cover pools, and represents the
Pfandbrief creditors’ interests. The creation of the office of cover pool administrator strengthens
the protection of the Pfandbrief creditors. It would be inappropriate if the management board of
the insolvent bank or bank at risk of insolvency were allowed to continue maintaining the cover
pools. Given the conflicting interests of the Pfandbrief creditors and the Pfandbrief Bank’s other
creditors, the insolvency administrator would likewise be unable to safeguard the Pfandbrief
creditors’ interests in the appropriate manner.
17
A number of alternatives are available to the cover pool administrator to ensure that the
Pfandbrief creditors’ claims are satisfied in a timely fashion:
18
He can take the payment flows of the cover pools and service the outstanding liabilities
in accordance with the terms of issue. In particular, he may sell individual assets in order
to procure liquidity and use a funding register for this purpose. This form of settlement
would be continued until all the Pfandbriefe were repaid. Any surplus would be passed to
the insolvency administrator.
As a result of the 2009 amendment, § 30 par. 2 sent. 5, 2nd half-sentence Pfandbrief Act
explicitly states that he may take up a refinancing loan in order to procure liquidity.
In the explanatory memorandum to the 2010 amendment (Bundesrat printed paper 155/10
of March 26, 2010, p. 77) clearly states that the general clause-like description of the
cover pool administrator’s powers and competences also include the issuance of bonds.
In the absence of provisions governing rank, such bonds would rank equal with Pfandbriefe issued prior to the nomination of the cover pool administrator, meaning they would
constitute covered bonds of Pfandbrief quality. Thus, the new provision set forth in § 2
par. 4 Pfandbrief Act provides the basis on which the cover pool administrator could issue
such bonds under the name “Pfandbrief”.
Following the 2009 amendment, § 31 par. 8 Pfandbrief Act explicitly states that the cover
pool administrator is entitled to make use of the Pfandbrief Bank’s staff and materials, and
that he must refund to the insolvent estate only the costs actually incurred in this respect.
The cover pool administrator has access to all payments that are made in respect of the
cover assets; the insolvency administrator must ensure such access by cooperating with
the cover pool administrator (see also § 31 par. 7 Pfandbrief Act). This also applies to
amounts or partial amounts which pertain to parts of loans included in cover which are
not eligible as cover for Pfandbriefe. The cover pool administrator must hand over such
amounts to the insolvency administrator when called upon to do so (§ 30 par. 3 sent. 3
Pfandbrief Act).
He may transfer all or parts of the cover assets in one cover pool and liabilities under the
Pfandbriefe, together, to another Pfandbrief Bank, subject to approval by the supervisory
authority (BaFin). In this context, he may agree with another Pfandbrief Bank that he will
hold the cover pools on a fiduciary basis for that Pfandbrief Bank. Transferring the cover
pools in this way rules out the need for complex and time-consuming individual transfers.
Rating agencies often raise the question of the “insolvency remoteness of the voluntary
overcollateralization”. A frequent consequence of the stress tests they apply for the timely
servicing of Pfandbriefe is that a Pfandbrief Bank must maintain overcollateralization
exceeding the legally required 2 %. In this connection, to question the insolvency remoteness of this “excess cover” is to ignore the fact that, within the scope of these stress tests,
such excess cover would automatically be part of the legally required cover. If a rating
agency does not believe that the cover assets are absolutely sound and therefore calculates
what overcollateralization is required, then logically these assets that constitute overcollateralization are not (from the rating agency’s viewpoint) “voluntary overcollateralization”
at all. Instead, they are part of the (normal) cover, since they are needed (in the rating
agency’s view) to ensure the Pfandbriefe are serviced on time. They cannot therefore
fall within the scope of application of § 30 par. 4 Pfandbrief Act. The German Federal
Government rightly points this out in its reply to a small interpellation (see Bundestag
printed paper 16/13823 of July 21, 2009, no. 6).
The Federal Agency for Financial Market Stabilsation has, under the Recovery and Restitution Act, been granted the authority to order the transfer of Pfandbriefe and cover assets from
a distressed bank. The question as to whether such a transfer may be carried out in a direct
manner or whether a cover pool administrator must be appointed for this purpose is regulated
by § 36a Pfandbrief Act. At any event, when the cover pool includes claims or collateral located
outside of the European Union or the European Economic Area, a cover pool administrator
must be involved for such transfer. This is because the transfer must be carried out in accordance with the law of the third country; first, recognition in third countries of orders issued by
an authority is less assured than when an order is issued by a legally appointed representative
such as the cover pool administrator; second, the contractual trustee agreements with which
the Pfandbrief creditors’ preferential right in case of insolvency is safeguarded in those third
countries are based on the cover pool administrator’s instructions.
Insolvency or Overindebtedness
Where there is a reason for insolvency with regard to the cover pools, separate insolvency
proceedings can be instituted in respect of them at the supervisory authority’s request. If
the Pfandbrief creditors are not fully satisfied under this procedure, they can assert their
remaining claims within the scope of the insolvency proceedings over the Pfandbrief Bank’s
other assets. Under the 2010 amendment of the Pfandbrief Act, § 30 par. 6 Pfandbrief Act
was supplemented accordingly, enabling the cover pool administrator to take the requisite
action.
19
CBPP3: The ECB’s third covered
bond purchase programme
By Ted Packmohr and Michael Weigerding, Commerzbank
20
Over the past twelve months hardly any other topic has influenced the
covered bond market as much as the ECB’s purchase programme. This
is also true for the Pfandbrief segment. On the one hand, the € central
banks’ purchases have pushed spreads to new lows and offered issuers
a safety net for new issues. On the other hand, however, they have
crowded out private investors and weakened market liquidity. In 2016,
the question about how the ECB can achieve a smooth market exit will
move into focus.
Why?
When the European Central Bank (ECB) announced its third covered bond purchase programme (CBPP3) in September 2014, the market was taken by surprise. This was above all
due to the fact that the goals of CBPP3 are considerably different from those of its predecessors. With its first purchase programme in 2009 the ECB explicitly aimed at boosting the
covered bond market itself. When it launched the CBPP2 in November 2011, the ECB wanted
to support banks' liquidity access via covered bond instruments. There was unanimous agreement that such measures were unnecessary in summer 2014. Nevertheless, the ECB decided
in favour of renewed purchases – this time aimed at achieving broader macro goals though
(credit supply, inflation expectations etc.). While such instrumentalisation of the covered bond
market might be debatable, it certainly gives evidence of the market's increased maturity and
systemic relevance.
What?
The criteria for CBPP3-eligible covered bonds have been based essentially on the two previous purchase programmes. Naturally, once again only € bonds from euro-zone issuers are admitted that would also be accepted as repo collateral by the central banks. (More specifically,
the own-use condition must additionally be met which requires a legal framework and CRR
compliant cover assets.) The purchases are carried out by the national € central banks and the
ECB itself, both on the secondary and primary markets.
However, to create the largest possible impetus, the ECB has allowed itself more scope on
some details this time. For instance, the maturity spectrum of eligible bonds has been widened. At the start of the programme, in particular, this is likely to have been used to drive up
its volume quickly by acquiring shorter-dated papers. This has been underlined not only by
market observations but is also evident from the CBPP3 reporting first redemptions of € 0.1 bn
in February 2015. In long-dated maturities (over 10 years) the ECB has also been more active
than previously, as reflected on the primary market several times.
21
ThePfandbrief 2015 | 2016
In addition, Multi-Cédulas and retained covered bonds are also explicitly admitted for the
purchases. We assume that the latter made a contribution at the end of 2014, in particular.
Yet this is not disclosed explicitly: In the official ECB programme statistics, purchases of retained covered bonds are reported under secondary market purchases rather than separately.
Likewise, no fixed purchase quotas by country/product have been disclosed. However, we
understand that the individual central banks divide up their CBPP3 purchases according to
the ECB’s capital key.
CBPP3 offers more scope in terms of eligible covered bonds when compared to previous programmes
Period: from…
… to
Target volume
CBPP1
CBPP2
CBPP3
July 2009
November 2011
October 2014
June 2010
October 2012
At least September 2016
€60bn
€40bn
Not specified but much higher
Euro zone banks
Euro zone banks
compared to previous programmes
Eligible issuers
Euro zone banks
+ Multi-Cédulas SPVs
Eligible instruments
Covered bonds that are UCITS-
Covered bonds that are UCITS-
Covered bonds that qualify
compliant or feature similar safety
compliant or feature similar safety
for ECB repos and are allowed
mechanisms and qualify
mechanisms and qualify
own use by the issuer
for ECB repos
for ECB repos
+ Multi-Cédulas
22
Eligible currencies
Rating requirements
Only euros
Only euros
Only euros
At least 1 investment-grade rating (BBB-),
At least 1 investment-
At least 1 investment-grade rating (BBB-)
generally at least 1 AA rating
grade rating (BBB-)
Exceptions for Cyprus and Greece
At least €100m,
≥€300m
Bond size
Maturities
Mainly 3-7 years
Max. 10.5 years
Not specified
Not specified, i.e. open to
very short- to long-dated maturities
(mod. duration 4.12)
Purchase limit per bond
Not specified,
i.e. open to smaller bonds
generally ≥€500m
Not specified
70% per ISIN (aggregated across all three
covered bond purchase programmes)
Market segments
Direct purchases on the primary
and secondary markets
and secondary markets
and secondary markets,
retained papers explicitly included
Share of primary relative to
secondary market purchases
Source: ECB, Commerzbank Research
27% to
37% to
As of end-June 2015: 18% to
73%
63%
82%
How much?
The demand overhang which already existed when the CBPP3 was announced prompted even
bullish market observers to believe that the ECB was unlikely to buy more than €50bn in covered bonds per year. In reality, however, it took the ECB only four months to exceed this level.
In July 2015, the ECB already crossed the €100bn mark. The CBPP3 portfolio expanded by a
whopping €10bn - €12bn per month over the first half of 2015. This was about twice the speed
of CBPP1 and six times the speed of CBPP2. However, with covered bond market liquidity increasingly weak, it remains to be seen how long this speed will be held up.
Monthly CBPP3 portfolio growth, in €bn
Volumes of the ECB's three covered bond
purchase programmes in their first months,
in €bn
Secondary market
100
Primary market
14
CBPP3
CBP2
CBPP1
12
80
10
60
8
40
6
23
4
20
2
0
0
Week 1
Week 11
Week 21
Week 31
Oct.14
Dec.14
Feb.15
Apr.15
Jun.15
Source: ECB, Commerzbank Research
Impact
Little wonder, this high intensity of covered bond purchases has changed the market's appearance:
For one, swap spreads tightened significantly in several waves. The first major move even set
in before the actual start of the programme, in reaction to its announcement; the second major
thrust occurred after additional QE measures had been announced in Q1 2015. In combination
with the general decline in yields, new Pfandbrief benchmark coupons dropped to a new low of
only 2.5bp in February as a result.
iBoxx swap spreads of selected CBPP3-eligible covered bond markets, in bp
DE
FR
ES (without Multi-Cédulas)
CBPP3 announcement
CBPP3 start
IT
QE announcement
QE start
80
70
60
50
bp
40
30
20
10
0
-10
-20
-30
July 14
Sep. 14
Nov. 14
Jan. 15
March 15
May 15
July 15
Source: Commerzbank Research
24
As a result, not only the yield spreads between different covered bond countries but also
spread differentials within the Pfandbrief segment tightened significantly. The latter had temporarily dropped to no more than a few basis points. There was thus hardly any credit differentiation left. While the general correction in May/June, which was closely linked to the Greek
crisis, also hit the Pfandbrief market, it did little to change this pattern.
At the same time, covered bonds not included in the purchase programme fell considerably
behind: For instance, Norwegian and Swedish issuers even underperformed CBPP3-eligible
bonds from weaker banks and countries, in spite of their sound fundamental data. All this confirms the strong spread-distorting nature of the purchase programme.
For another, the CBPP3 has shaped the covered bond primary market. Although ECB statistics
show that purchases related to the primary market accounted for less than one fifth of the
overall tally as of end-May, they have become a major pillar in the order books of eligible new
issues. Overall, the share of central banks and SSAs in the purchases of new CBPP3-eligible
covered bond benchmarks has tripled. This basically applies across all maturities and names
and is also true of Pfandbriefe. By contrast, the central bank/SSA share remained stable in
the non-CBPP3-eligible peer group. For issuers, the CBPP3 therefore offers an anchor in the
form of minimum demand as well as a safety net which allows them to react flexibly to fluctuations in private investor demand: If an order book is weak and features little private investor demand, central banks generally receive higher allocations of the new issue. There are
some examples, also including Pfandbriefe, where due to the low-interest environment new
benchmark order books were barely oversubscribed and central banks/SSAs received 60 % of
the deal volume as a result. In these cases, the CBPP3 should have accounted for around half
of the volume launched. The 70% purchase limit per bond/ISIN offers the central banks sufficient leeway in this respect. The ECB can therefore pave the way for new issues which would
otherwise be marketable only under much more defensive conditions.
Initially, this greater independence from the genuine market was also reflected in a more flexible timing of new deals: While, traditionally, the first half of the week has been the window of
choice for new issuance projects, the share of € benchmarks launched on a Thursday or even
Friday temporarily jumped from around 20% to almost 40% after the start of the CBPP3. Only
the general market fatigue has triggered a return to more normal patterns.
Share of selected investor groups in new € benchmark covered bond issues
Central banks/SSAs
100 %
Others
Germany
Asset Managers
€ countries
non-€ countries
80 %
60 %
40 %
20 %
0%
01.2014
to 09.2014
10.2014
to 06.2015
01.2014
to 09.2014
10.2014
to 06.2015
01.2014
to 09.2014
10.2014
to 06.2015
Placement share of central banks/SSAs in new Pfandbrief benchmark issues
between Jan-2014 and Jun-2015
Order book oversubscription
≤ 100 %
>100 %
40 %
30 %
20 %
10 %
0%
Before CBPP3
Since CBPP3
Supported by these factors, many Pfandbriefe up to the medium-maturity segment were temporarily trading at slightly negative yields. A stronger slide below zero is likely to have been
prevented only by the fact that the ECB was reluctant to buy covered bonds with a negative
yield until into February. As long as the market’s direction appeared to be determined by the
ECB’s QE measures, investors have made up for some of this lack of yield by switching into
longer maturities. Consequently, we temporarily noted very flat yield curves and partially inverted spread curves. Between September 2014 and May 2015 the yield differential between
10y and 1y Pfandbriefe shrunk by one third before a normalisation set in on the back of the
subsequent market correction.
25
Der Pfandbriefmarkt
CBPP3: The ECB’s
third covered bond purchase programme
2010/2011
On the primary market, the hunt for yield was reflected in a growing share of longer-dated
maturities. Instead of the usual focus on the 5y segment, 7y bonds predominated in H1 2015.
Moreover, there was an increasing number of long-dated papers with 10y to 20y maturities.
Only when duration fears moved back to the fore – owing to the strong yield setback in May/
June – did this trend come to an end.
German Pfandbrief benchmark yield curve
as of 1 September 2014
1 May 2015
15 June 2015
120
100
1
bp
80
2
60
40
20
0
-20
2016
26
2018
2020
2022
2024
Maturity split of new € benchmark covered bond issues
less than 6 years
6 to 9 years
more than 9 years
100 %
80 %
28%
60 %
44%
40 %
43%
69%
20 %
0%
Q1.2014
Q2.2014
Q3.2014
Q4.2014
Q1.2015
Q2.2015
Although, in this correction phase, the CBPP3 purchases were not upped in line with the
growing selling pressure, German Pfandbrief swap spreads remained remarkably stable
initially. While some of the negative price effect for bondholders was mitigated as a result,
the relative value position of Pfandbriefe compared to government bonds deteriorated noticeably this way. While, temporarily, more expensive German Pfandbriefe in the 10y maturity
segment offered no more than single-digit basis point yield pick ups over Bunds, the spread
differentials in other countries slid (even further) into negative territory. Therefore, the artificial stabilisation of the covered bond market on the back of the CBPP3 can be a major obstacle
in the alignment of relative value balances. This has put another damper on private investor
demand.
The largest problems:
Crowding-out of private investors,
illiquidity and the exit
The combination of low but still volatile yields, artificial shortage and relative overvaluation
of covered bonds has also made the Pfandbrief product less attractive for private investors.
This is reflected both in the declining share of long-dated private placements as well as the
low subscription rates of asset managers in new Pfandbrief benchmark order books. Several
funds have actively reduced their covered bond holdings; some no longer replace maturing
papers by new investments. Initially, some of this had been offset by growing interest from
banks increasingly using covered bonds to build up their liquidity buffers (LCR). However,
amid the market correction in spring 2015 at the latest, this source of demand has also
become less relevant in our view, and the covered bond investor base has lost some of its
former breadth for the time being.
For one, this has contributed to the decline in market liquidity. In periods of volatility, not
only do market makers’ indicative screen prices prove less reliable – some positions can
barely be settled. This has become a major issue for many investors and traders and could
dominate their perception of the covered bond market longer term.
For another, this triggers fears about the potential market reaction to an expiration of CBPP3.
It remains to be seen whether those investors who have moved out can be won back quickly
enough to close the gap likely to open up after the ECB's exit. In such an environment, it will
be difficult to avoid negative spread reactions. Although the CBPP3 is designed to run at least
until September 2016, the market is therefore likely to factor in potential exit scenarios early on.
Which elements would be important for a smooth transition? Any announcement of a fixed
exit date with purchases dropping from 100 to zero would trigger final round effects and hit
the market early on. While supply would be front-loaded in order to benefit from the last ECB
purchases, private demand would already drop before this, in anticipation of later spread widening. Oversupply with premature spread pressure would be the result. We believe a smooth
CBPP3 exit can therefore only be achieved in a gradual way. At the same time, the ECB should
maintain sufficient flexibility on its way out to counteract any potential spread speculation.
27
by RA Peter Scherer, LL.M. (I.U.), GSK Stockmann + Kollegen, Frankfurt am Main
28
The legal profession understands the concept of “preferential treatment” as
being a justified, positive exemption from the rule of equal treatment. We
all know that apples and oranges both are fruit, but they are different things
and cannot be compared. And one shouldn't use oranges if your recipe is for
apple pie. Similarly, a Pfandbrief is a security instrument and a specific form
of “covered bond”, but there are various good or even imperative reasons
for treating it differently than other securities in legal terms. This article discusses the preferential regulatory treatment of the German Pfandbrief in this
sense.
Good or even imperative reasons? Notably, the German Pfandbrief has been around for almost
250 years. As its structure is defined by statute, the Pfandbrief comes with a high level of
security, especially with the highest possible degree of insolvency remoteness, a verifiable
valuation of its cover assets, robust revenues and liquid trading markets with little market
volatility, all making it the primary funding tool in the German banking sector, writing a true
story of success. There has never ever been a Pfandbrief crunch, neither in the two world wars
nor in the most recent crises, meaning the global financial markets crisis and the European
public finances crisis. These facts not only make the Pfandbrief attractive to investors but also
allow legislators and regulators to treat the Pfandbrief differently than other securities, at least
in part. The key examples of special regulatory treatment, meaning the preferential treatment
of the Pfandbrief – and some other covered bonds – are the following:
Credit risk calculation in banks
The rules governing the regulatory capital of banks as set forth in the European Capital Requirements Regulation (“CRR”)1) define not only what belongs to the own funds of a bank
and the ratio of such own funds to the bank's risk-weighted assets (capital ratio) but also the
methods for the weighting of risk assets. The rules addressing counterparty default risks (also
known as counterparty risks or credit risks) are particularly important. A bank may apply one
of three methods for risk-weighting these risks: (i) the Credit Risk Standardised Approach
(“CSA”) or an Internal Ratings-Based Approach (“IRBA”), either in the form of (ii) the Basic
Approach or (iii) the Advanced Approach:
If a bank chooses the CSA, the rating of an asset such as a Pfandbrief exposure is based on
a scale of tiers that is built by reference to external rating categories, on the one hand, and
the exposure classes enumerated in article 112 of the CRR, on the other hand. These exposure classes comprise, inter alia, exposures to supervised institutions (for example, banks)
or exposures secured by real estate as well as “exposures in the form of covered bonds”
(lit. 1), including Pfandbrief instruments.
1)
Regulation (EU) 575/2013 of 26 June 2013 on prudential requirements for credit institutions and investment firms,
Official Journal of the European Union (“OJEU”) L 176/1, 27 June 2013; quite helpful for understanding the CRR:
Luz/Neus/Schaber/Schneider/ Wagner/Weber, CRR visuell, Stuttgart 2013
29
30
Article 129 of the CRR specifies the mode of calculation for this exposure class, including
a definition of eligible covered bonds and the requirements to be met (article 129 paras.
1 to 3 of the CRR), which Pfandbriefe meet on a regular basis. For covered bonds with an
external rating, the CRR requires risk weights between 10 and 100 % depending on the
rating category (article 129 para. 4 of the CRR); for covered bonds with no external rating,
the CRR defines generally the same range of risk weightings which however depend on the
risk weightings assigned to their issuers: 10 % instead of 20 %, 50% instead of 100 %, and
100 % instead of 150 % (article 129 para. 5 of the CRR). Furthermore, the CRR includes a
provisional provision for covered bonds issued before 31 December 2007 (article 129 para. 6
of the CRR) and an option for an even more preferential treatment where the issuer provides certain portfolio information at least semi-annually (article 129 para. 7 of the CRR).
Conversely, when a bank chooses the IRBA Basic Approach, it will create its own risk calculation model, subject to approval by the regulatory authority, which incorporates certain
parameters, specifically the exposure at default (EAD), the probability of default (PD), the
loss given default (LGD), and the maturity (M). Subject to certain alternatives, this process has to consider seven potential IRBA exposure classes. There is no designated IRBA
exposure class for Pfandbrief instruments or covered bonds. However, regarding loss
given default, article 161 para. 1 lit. d of the CRR provides that covered bonds as defined in
article 129 paras. 4 and 5 of the CRR may have an eligible LGD of 11.25%.
When a bank chooses the Advanced IRBA, no such requirements apply, and the bank's
own risk calculation model may reflect individually what is special to its Pfandbrief instruments /covered bonds
Generally, as compared to other securities, even including bank bonds, covered bonds/Pfandbrief instruments have a much better position when it comes to risk weighting. However, this
situation is not necessarily to subsist. According to article 503 of the CRR, the European Commission had to announce by 3 December 2014 whether this preferential treatment and the
criteria of article 129 of the CRR are still justified. Prior to its announcement, the European
Banking Authority (“EBA”) on 1 July 2014 issued a report finding the preferential risk weightings the CRR assigns to covered bonds to be justified while suggesting additional requirements2): These suggestions include reducing the liquidity risk, providing for a minimum
surplus cover by law, defining the role of public supervision, and extending the transparency
duties under article 129 para. 7 of the CRR, and no preferential treatment should be afforded
under the CRR to covered bonds that are secured by aircraft mortgages (for example, aircraft
Pfandbrief instruments). 3)
Nothing is set in stone, neither the preferential treatment of covered bonds in the CRR nor
the privileging of instruments under the CRR in general, and one should expect them to be
scrutinised frequently and to be modified, if necessary. Currently, there is a lot of talk and controversy about a harmonisation of the law governing covered bonds in Europe. When it comes
to the CRR rules on how to treat them in calculating the regulatory capital of banks, however,
there seems to be agreement that these rules are appropriate, roughly speaking.
2)
EBA Report on EU Covered Bond Frameworks and Capital Treatment, London 2014. Addressing its mandate by the European Systemic Risk Board (“ESRB”), the EBA Report further makes proposals for a guideline that national legislators shall adhere to when modifying relevant legislation in future (for instance the Pfandbrief Act in Germany).
2)
Cf. Kullig, Covered Bonds – eine neue Ära bricht an, Immobilien & Finanzierung 2014, 458 et seqq., addressing the suggested
“principles of best practice”/guidelines for national legislators as well as the criticism regarding the EBA Report
Liquidity buffer for banks
In its articles 411 to 428, the CRR further defines new liquidity requirements for banks. The
indicator denominated as “liquidity coverage ratio“ (“LCR”) obliges an institution to maintain
a liquidity buffer in the form of highly liquid assets to compensate net liquidity outflows over
a 30-day period under stressed circumstances.4) According to article 460 of the CRR, the LCR
will be phased in in four steps until 1 January 2018, and the European Commission is empowered (in conjunction with article 462 of the CRR) to adopt a delegated act to specify the LCR
in more detail. The European Commission adopted such a delegated act on 10 October 2014
defining, inter alia,5)eligible assets for the liquidity buffer under the LCR as well as their scope.
Considering a variety of studies,6) the European Commission concluded that certain covered
bonds/Pfandbrief instruments stand out for being crisis-proof instruments as their liquidity is
more similar to that of sovereign bonds unlike other security instruments, and the Commission
paid regard to this fact by way of complex categorisation: (i) Covered bonds/Pfandbrief instruments in rating category 1 and with a minimum issuing volume of EUR 500 m are considered
“extremely high quality liquid assets” (“EHQLA”) and are categorised in level 1, meaning they
require not more than a 7% safety margin (“haircut”) off their market value, and up to 70% of
the LCR liquidity buffer may consist of such instruments (“cap”). (ii) Covered bonds/Pfandbrief
instruments in rating category 2 and with an issuing volume of EUR 250 m are considered
“high quality liquid assets” (“HQLA”) and are categorised in level 2A, meaning a 15% haircut
and a cap at 40%. (iii) Only covered bonds/Pfandbrief instruments with no minimum rating requirement are categorised in level 2B, meaning a 30% haircut and a cap at 15%.
In addition to its rules on the LCR, the CRR sets forth rules on stable funding (articles 427,
428 of the CRR). For instance, banks need to report on certain items that offer stable funding.
According to article 427 para. 1 lit. b no. x of the CRR, this includes liabilities resulting from
covered bonds issued according to article 129 paras. 4 and 5 of the CRR or article 52 para. 4
of the UCITS Directive (2009/65/EC). Established by the Basel Committee as part of Basel 3,
the “Net Stable Funding Ratio” (“NSFR”) will not be introduced by the European Union until
1 January 2018. According to article 510 of the CRR, EBA will present its respective report by
the end of 2015, and the European Commission will present its proposal by the end of 2016.
In summary, the new liquidity rules for banks also afford a preferential treatment to Pfandbriefe and covered bonds (although subject to certain quality features, their preferential
treatment in comparison to other securities is evident). This is due to the above-mentioned
empirical data but not only, perhaps it is also due to the new rules' capability of minimising a
correlation between national debt and stress resilience of national banking sectors.
Luz/Neus/Schaber/Schneider/Wagner/Weber, ibid., page 151
Commission Delegated Regulation of 10 October 2014 to supplement Regulation (EU) 575/2013 with regard to liquidity coverage
requirement for credit institutions (C (2014) 7232 final)
6)
European Commission, Green Paper of 25 March 2013 on the long-term financing of the European economy; EBA, Report on definition of HQLA, London, 23 December 2013; Dick-Nielsen/Gyntelberg/Sangill, Liquidity of Danish Government versus Covered Bonds
Markets, Bank for International Settlements (“BIS”), Working Papers, No. 392 (2012); European Covered Bonds Council (“ECBC”),
Covered Bonds as Extremely High Liquid Assets (Level 1) under the Liquidity Coverage Ratio, Brussels, February 2014
4)
5)
31
Exemption from large exposure requirements
The large exposure requirements for banks are contained in articles 387 to 403 of the CRR,
which provide for the definition, notification and limitation of facilities that exceed a certain
amount on an absolute or relative basis and therefore pose specific risks. In certain circumstances, exposures in relation to a group of customers are aggregated into a single exposure
item. Formerly known as borrower unit, this group is now referred to as “group of connected
clients” and has been defined in article 4 para. 1 no. 39 of the CRR. Article 392 of the CRR
sets forth the large exposure definition limit (10 %), and article 395 of the CRR contains the
large exposure limit (a maximum of 25 % of the institution's eligible capital). Article 400 para.
1 of the CRR enumerates exemptions regarding the eligibility of exposures and other risk
items concerning this large exposure limit, and article 400 para. 2 of the CRR defines further
exemptions the competent national authorities may apply wholly or in part. This encompasses
covered bonds as defined in article 129 paras. 1, 3 and 6 of the CRR (see above)/article 400
para. 2 lit. a of the CRR.
32
In Germany, this exemption is applied in the Federal Ministry of Finance's Regulation of
1 January 2014 governing large exposures and million loans (Groß- und Millionenkreditverordnung – “GroMiKV”)7) in that section 1 para. 1 of the GroMiKV exempts covered bonds/
Pfandbrief instruments fully in the calculation of the utilisation of the limit for large exposures.
Hence, the large exposure rules definitely include a preferential treatment of Pfandbrief instruments and covered bonds.
Bank restructuring
Drawing a lesson from the global financial markets crisis, the European legislator created new
European requirements for bank restructuring and resolution, primarily the Bank Recovery
and Resolution Directive of 15 May 2014 (“BRRD”).8) The resolution tools stipulated in article
37 para. 3 of the BRRD include a sale-of-business, a bridge institution, an asset separation,
and a bail-in. The details are set out in articles 43 et seqq. of the BRRD.
According to article 44 para. 2 lit. b of the BRRD, the resolution authorities shall not exercise
their write-down or conversion powers available under the bail-in tool when it comes to collateralised liabilities including covered bonds. Article 2 no. 96 defines these by reference to
the UCITS Directive.9) The third to last paragraph of article 44 para. 2 of the BRRD reiterates
that Member States shall ensure that “all secured assets relating to a covered bond cover pool
remain unaffected, segregated and with enough funding.”10)
7)
Regulation of 6 December 2013, Federal Law Gazette (Bundesgesetzblatt – “BGBl”) I page 4183 (No. 73); most recent amendment
by article 15 of the Act of 15 July 2014, BGBl I page 934
8)
Published in OJEU L 173/190 of 12 June 2014
9)
Article 52 para. 4 of Directive 2009/65/EC of 13 July2009 on the coordination of laws, regulations and administrative provisions
relating to undertakings for collective investment in transferable securities (“UCITS”)
10)
Including on the limitations to this rule relating to exceeding cover; cf. also Kälberer, Bankenunion und Pfandbriefe,
Der Pfandbrief 2014/2015 (vdp), Berlin 2014, page 39 et seqq.
In Germany, the BRRD was implemented into national law by the BRRD Implementation11)
Act whose article 1 created the new Recovery and Resolution Act (Sanierungs- und Abwicklungsgesetz – “SAG”). Implementing article 44 para. 2 of the BRRD, section 91 para. 2 lit. 2
of the SAG exempts covered bonds from the scope of the bail-in tool “to the extent they are
secured or covered by at least the value of the collateral created for this”.12)
In the context of bank recovery and resolution, the European Union further adopted Regulation
806/2014 (“SRM Regulation”).13) Article 27 of the SRM Regulation exempts “covered bonds”
(as defined in article 3 para. 1 no. 52 of the SRM Regulation by reference to the UCITS Directive) from the bail-in tool. The German act for implementing the SRM (“Resolution Mechanism
Act – Abwicklungsmechanismusgesetz”)14), the draft of which is currently under discussion,
provides for amendments to the Banking Act (Kreditwesengesetz – “KWG”), the SAG and the
Pfandbrief Act, which all are driven by the SRM Regulation, but it does not amend section 91
of the SAG.
Therefore, the BRRD, the SRM Regulation and the SAG afford preferential treatment to the
Pfandbriefe and other covered bonds in the context of a bail-in for resolution by exempting
them on principle.
Investment restrictions for funds
As has been stated above,15) article 52 para. 4 of the UCITS Directive includes a definition of
“certain bonds” which can be read as such for covered bonds. For these, a Member State shall
raise the limit up to which the securities funds that are subject to the UCITS requirements may
invest in such securities, from 5 to 25 %. However, where an UCITS fund generally invests
more than 5 % of its assets in the bonds issued by the same issuers, the total value of these investments shall not exceed 80 % of the assets of the UCITS. Section 206 para. 3 of the German
Capital Investment Code (Kapitalanlagegesetzbuch – “KAGB”) implements these requirements
for Pfandbrief instruments, municipal bonds and EU/EEA bank bonds, which again affords
preferential treatment to Pfandbrief in comparison to other financial instruments.
BRRD Implementation Act of 10 December 2014, BGBl 2014 I No. 59 of 18 December 2014, pages 2091 et seqq.
Cf. also the reasons in support of section 91 of the SAG on page 228 of the bill
13)
OJEU L 225/1 of 30 July 2014
14)
Federal government's minister bill of 6 March 2015
15)
See footnote 9
11)
12)
33
Investment restrictions for insurance undertakings
The mentioned definition in article 52 para. 4 of the UCITS Directive is further contained in
section 2 para. 1 no. 6 of the German Federal Government's Regulation of 20 December 2012
on the investment of restricted assets of insurance undertakings (Investment Regulation (Anlagenverordnung – “AnlV”)). Section 3 of the AnlV does not provide for any specific quantifiable
investment restrictions for Pfandbrief instruments/covered bonds (but it does for many other
investments, though not for all of them). In the context of the debtor-related investment restrictions (diversification) in section 4 of the AnlV, para. 2 provides for 30 % instead of 5 % for
investments “put into circulation by one and the same credit institution domiciled in a member state of the EEA or in a full member state of the OECD, if these are secured through a special cover pool in accordance with the law.” This definition of covered bonds departs from that
in section 2 para.1 no. 6 of the AnlV, but clearly encompasses German Pfandbriefe. The fact
that investing in Pfandbrief instruments is suitable for restricted assets is further confirmed
in section B.4.4 lit. a of Circular 4/2011 (VA) of 15 April 2011 issued by the Federal Financial
Services Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – “BaFin”)
(Capital Investment Circular). While this does not afford any preferential treatment, the provision in section 4 para. 2 of the AnlV does.
34
However, requirements are going to change for many insurance undertakings, especially the
larger ones. The European Union's Solvency 2 Directive16) brings fundamental changes both
to the capital and equity requirements to be met by insurance undertakings and to the valuation of assets and liabilities. In future, undertakings concerned need to match their investments with equity – similar to banks under the CRR – the volume of which shall depend on
the exposure created by the investment (article 101 of the Solvency 2 Directive). The start
date is 1 January 2016. The Solvency 2 Directive has been implemented in Germany by corresponding amendments to the Insurance Supervisory Act (Versicherungsaufsichtsgesetz –
“VAG”) via the Act of 1 April 2015 to Modernise Financial Supervision of Insurance Undertakings17) (Gesetz zur Modernisierung der Finanzaufsicht über Versicherungen).
Solvency 2 will be aiding the Pfandbrief and other covered bonds (meeting the UCITS definition) in that the regulatory capital cover for those having a triple or double A rating will be
substantially lower than that for unsecured bank bonds, corporate bonds, or securitisations.18)
Solvency 2 will ensure preferential treatment of many Pfandbrief instruments and covered
bonds.
16)
Directive 2009/138/EC of 25 November 2009 on the taking-up and pursuit of the business of insurance and reinsurance (Solvency 2),
OJEU L 335/1 of 17 December 2009 (Level 1 Directive)
17)
Act of 1 April 2015, BGBl. I page 434
18)
Cf. article 180 para. 1 of Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC
of the European Parliament and of the Council on the taking-up and pursuit of the business of insurance and reinsurance (Solvency 2)
Eurosystem collateral
Central banks are the key source of funding for banks. A Eurozone bank wishing to obtain
money from its national central bank needs to provide eligible collateral in return. The details
are set out in articles 58 et seqq. of Guideline (EU) 2015/510 of the European Central Bank
(“ECB”) of 19 December 2014 on the implementation of the Eurosystem monetary policy
(ECB/2014/60)19) (“ECB Guideline”). As part of the criteria for eligibility, such Eurosystem
collateral needs to meet the high credit standards specified in the Eurosystem credit assessment framework (“ECAF”) (article 59 para. 1 of the ECB Guideline). Article 129 of the ECB
Guideline defines five haircut categories for marketable collateral such as securities including
Pfandbrief instruments/covered bonds. Haircut category II includes so-called jumbo Pfandbriefe and category III includes traditional Pfandbriefe and other covered bonds. Table 1 in
Annex X to the ECB Guideline, in accordance with article 130 of the ECB Guideline, shows the
levels of the specific valuation haircuts – for Pfandbrief instruments in category II, depending
on the credit quality/rating, the haircut is between 1 % and 8 %/10.5 %; for Pfandbrief instruments in category III it is between 1 % and 9 %/13 %. Conversely, securities in category IV
(for example, unsecured bank bonds) will see haircuts from 6.5 % to 17 %/22.5 %, and securities in category V (ABSs) an uniform haircut of 10 %.20)
Furthermore, article 138 para. 1 of the ECB Guideline states: “Irrespective of the fact that an
asset is eligible, a counterparty shall not submit or use as collateral assets issued, owed or
guaranteed by itself or by any other entity with which it has close links.” However, article 138
para. 3 includes two relevant exemptions, including (point b) for covered bank bonds meeting the requirements set out in article 129 paras. 1 to 3 and 6 of the CRR. This exemption fits
Pfandbrief instruments and covered bonds with a corresponding rating. In these instances,
Pfandbrief instruments or other covered bonds can be used as Eurosystem collateral even if
they were issued by the user (the Eurosystem counterparty) itself or by an entity having “close
links” with the user (and if they further meet all requirements, hence they are eligible and
therefore included in the ECB list of eligible marketable assets).
In summary, not only the legislation of the European Union but also the ECB's Eurosystem
rules include provisions for preferential treatment of Pfandbriefe/covered bonds.
OJEU L 91/3 of 2 April 2015
Own-use covered bonds are subject to an additional valuation haircut; cf. article 130 para. 4 of the ECB Guideline
19)
20)
35
Pfandbrief law
The German law governing the Pfandbrief, especially the Pfandbrief Act, has the largest part
in the Pfandbrief’s “preferential treatment”. Already the fact that it is German statutory law
which sets forth the Pfandbrief rules in full detail distinguishes the Pfandbrief from other debt
instruments, which Germany's civil law addresses only marginally (for instance bearer bonds
in sections 793 et seqq. of the Civil Code [Bürgerliches Gesetzbuch – “BGB”]) and which are
defined by contract in all other respects. The Pfandbrief stands out for the profound substance
of the Pfandbrief Act provisions:
36
According to section 2 para. 1 of the Pfandbrief Act in conjunction with section 1 para. 1
sent. 2 no. 1a of the KWG, a specific BaFin licence is required for issuing Pfandbrief
instruments.
The BaFin further operates as public authority supervising Pfandbrief banks (section 3
of the Pfandbrief Act in conjunction with section 6 para. 1 sent. 1 and section 44 para. 1
sent. 2 of the KWG).
The high quality of its cover assets adds to the attractiveness of the German Pfandbrief as
well as its valuation under the strict standards for the determination of the lending value
according to section 16 para. 2 of the Pfandbrief Act in conjunction with the German Regulations on the Determination of the Lending Value (Beleihungswertermittlungsverordnungen – “BelWertV”). For instance, cover for real estate financings must not exceed 60%
of the mortgage lending value.
According to section 4 of the Pfandbrief Act, Pfandbrief instruments outstanding are subject to matching cover pools at all times as regards their nominal and net present value;
the details are specified in the Pfandbrief Net Present Value Regulation (Pfandbrief-Barwertverordnung – “PfandBarwertV”).
A 2% surplus cover is stipulated in section 4 para. 1 of the Pfandbrief Act.
According to section 4 para. 1a of the Pfandbrief Act, liquidity has to be ensured for the
next 180 days.
Pursuant to section 5 of the Pfandbrief Act, the cover assets shall be registered in a
designated cover pool register.
In accordance with section 7 of the Pfandbrief Act, the BaFin appoints a statutory trustee
as independent body checking the Pfandbrief instruments for their proper matching cover
and the proper entry of cover assets in the relevant cover pool register.
The law further specifies a number of transparency requirements (section 28 of the Pfandbrief Act).
Equally important are the statutory requirements for the risk management of Pfandbrief
banks in section 27 of the Pfandbrief Act and the notification duties to the BaFin in section
27a of the Pfandbrief Act.
The separation principle applying in the event of a Pfandbrief bank's insolvency (sections
30 et seqq. of the Pfandbrief Act) is perhaps the key regulatory privilege of the German
Pfandbrief, making the cover pool available primarily for the Pfandbrief creditors/holders
(and in certain circumstances to the derivatives creditors) to satisfy their claims, and ensuring that the cover pool does not become part of the issuer’s insolvency estate.
The cover pool is kept separate (section 30 para. 1 of the Pfandbrief Act), with no access
by the insolvency administrator of the Pfandbrief bank/Pfandbrief issuer and no accelerated
maturity of the Pfandbrief instruments. On principle, the Pfandbrief instruments, in accordance with their terms, will be serviced on the basis of the income on the cover assets until
they are paid off according to contract. Only a surplus, if any, is added to the Pfandbrief
bank's general insolvency estate. In the event of insolvency, the separated cover pool of
the (now insolvent) Pfandbrief bank will become, for each Pfandbrief category individually,
a “Pfandbrief bank with limited business activity” which, according to section 2 para. 4 of
the Pfandbrief Act, does not need a new BaFin licence under the KWG. As the separated
cover pool does not become part of the insolvency estate, it will not be managed by the
Pfandbrief bank's insolvency administrator but rather by an own designated administrator,
an insolvency trustee (Sachwalter), whom the competent court will appoint at the BaFin's
request. Where a cover pool is illiquid or heavily indebted, such a “Pfandbrief bank with
limited business activity” may enter into (separate) insolvency proceedings as set out in
section 30 para. 6 of the Pfandbrief Act. If they incur a loss, the Pfandbrief creditors will
have a claim for recourse against the insolvency estate of the (former) Pfandbrief bank and
they become regular creditors in the latter’s insolvency.
Hence, the German legislator has created a special and privileged statutory insolvency
regime for the German Pfandbrief. It is hard to image a stronger method of preferential
treatment in comparison to other financial instruments.
In light of the forms of preferential regulatory treatment discussed in this article and against
the background of the “regulatory tsunami” in the past years of post-global financial markets
crisis (including various amendments to the Pfandbrief Act), a great lot has been accomplished
for the Pfandbrief as a product. Remembering the ancient Greek panta rhei concept (i.e. the
rule that everything flows), we should not be surprised by facing new challenges: The European Commission's Green Paper on long-term financing and the EBA's proposed Guidelines
have sparked a discussion on harmonising the law governing covered bonds. The European
Commission's most recent Green Paper on building a Capital Markets Union includes thoughts
on how to shape an integrated European cover bonds market and to enhance the comparability of covered bonds with other financial products.21) The future of the Pfandbrief will depend
largely on the legislators’ ability (and willingness) to prevent its dilution and deterioration in
exchange for harmonisation.
The forms of preferential regulatory treatment discussed in this article, rather than being
arbitrary privileges, are special requirements that are appropriate for a product that is different
than others when it comes to key aspects. Even so, one will have to defend these “privileges”
over and over again, and such efforts cannot succeed unless the reasons for different and
preferential treatment subsist.
European Commission, Green Paper on building a capital markets union, Brussels, 18 February 2015, page 15
21)
37
Capital Markets Union
and Covered Bonds –
Key to Long-term Financing
and Growth
Wolfgang Kälberer | Association of German Pfandbrief Banks
38
Under President Jean-Claude Juncker, the European Commission unexpectedly announced a far-reaching change in policy in November 2014, shortly
after the Commission took up office. This new direction may be summed up
roughly as follows: less regulation, more growth. In fact, the previous Commission had recognized during the last third of its term in office that action
was needed to give Europe’s flagging economy fresh impetus and generate
growth: in March 2013 it presented a Green Paper on long-term financing of
the European economy and put its thoughts on the matter up for discussion.1)
Green Paper on Long-term Financing of the European Economy
It all began with the finding that the new regulatory provisions were forcing banks to scale
back their lending and reduce their balance sheets, which, in turn, impaired the capacity of
the European banking sector to provide the real economy with credit. This was especially true
of longer-term loans and was not restricted solely to the EU’s so-called periphery countries.
In fact, new banking regulation tends to incentivize banks to focus on short-term lending. In
addition, the regulatory environment changes repeatedly and sometimes unpredictably, making it difficult for banks to plan long-term and, logically, to provide long-term financing. At the
same time, the financial crisis was eroding borrowers’ and institutional investors’ confidence
and their propensity to take risks.
The aim of the Green Paper, then, is to make the European economy less dependent on the
traditional bank loan, and to arrive at a more widely diversified financing system characterized by a significantly larger share of direct capital market financing for companies and
greater involvement by institutional investors and other financial market players. The main
thrust of the initiative is a substantial expansion of corporate finance from which small and
medium-sized enterprises, in particular, should benefit, as well as infrastructure financing and
the revival of the securitization market. And in this context, the European Commission also
addresses covered bonds and emphasizes their resilience during the crisis.
2)
Communication of the European Commission
One year later, in March 2014, the European Commission presented a Communication on
long-term financing of the European economy, in which – once comments on the Green Paper
had been evaluated – concrete measures were announced.
1)
Green Paper on long-term financing of the European economy
<http://ec.europa.eu/finance/general-policy/financing-growth/long-term/index_en.htm>
2)
Communication on long-term financing of the European economy
http://ec.europa.eu/finance/general-policy/financing-growth/long-term/index_en.htm
39
This Communication can be understood as the Commission’s political “legacy” at the end of
its period in office. Encouraged by a largely positive response from participants in the consultation process, including the EU Member States and the European Parliament, the Commission
reaffirms its commitment to seek new stimuli for growth, above all outside the strictly regulated banking sector, in order to unlock new sources of private investment capital to provide
the economy with long-term financing. The main objectives are to mobilize private capital to
finance infrastructure and to develop the capital markets in order to give small and mediumsized enterprises better access.
A short passage also outlines the new steps envisaged for the European covered bond markets. The European Commission points out that there is as yet no uniform, harmonized, legal
framework in the EU for covered bonds, although there are many cases in which EU legislation contains references to covered bonds. For this reason, the Communication announces
two initiatives. First, the criteria for covered bonds in Article 129 of the Capital Requirements
Regulation (CRR) are to be subjected to a critical review to ascertain whether the preferential
risk weight treatment granted to credit institutions’ investments in covered bonds is still justified. Second, a study is to be carried out on the merits of a uniform EU-wide legal framework
for covered bonds.
Against the backdrop of the Green Paper and Communication on long-term financing, in
mid-2014 the Pfandbrief banks raised the question as to the future role of banks in long-term
financing and commissioned the Cologne Institute for Economic Research (IW) to examine
the importance of long-term financing as provided by banks.
40
Importance of Long-term Financing by Banks3)
Published in spring 2015, the analysis shows that other financial intermediaries will scarcely
be able to replace banks as providers of long-term financing. Banks have at their disposal a
wide range of instruments through which they can grant long-term loans. They have access
to a broad mix of funding instruments comprising equity, deposits, secured and unsecured
bonds, and securitizations. Furthermore, banks are able to spread refinancing risks and,
should short-term bottlenecks arise, they can also fall back on central bank funds and the
interbank market.
In addition, banks have carved out for themselves a dominant position in long-term financing
through their many years of experience in risk monitoring, creditworthiness assessment, market analysis, credit monitoring and maturity transformation – a position that alternative finance
providers are unlikely to achieve. Against this background, a shift of long-term lending to other
market participants would only be possible through disparities in regulation or by means of
other incentives.
The authors of the IW analysis come to the conclusion that banks will remain the main providers of long-term credit. However, they argue that some aspects of banking regulation need to
be adjusted or better coordinated so that long-term financing is not unduly impeded. Precisely
those institutions that specialize in long-term real estate and public-sector lending usually
IW Analysis No. 101: The importance of long-term financing by banks, Cologne 2015
3)
display low unweighted capital ratios (leverage ratio). However, the uniform leverage ratio of
3% which is currently defined as the target level generally conflicts with the low-risk but highvolume business of real estate finance conducted by specialist real estate lenders in particular.
Providers of long-term financing face another obstacle in the form of the Net Stable Funding Ratio (NSFR), which currently gives privileged status to deposits as a stabile refinancing
instrument but imposes high haircuts on covered bonds/Pfandbriefe with residual maturities
from under one year. This makes it impossible, the IW analysis points out, to fully refinance a
long-term portfolio with Pfandbriefe.
The analysis concludes with a very important point where long-term financing is at stake,
namely that long-term lenders need planning security, and that this is being undermined by
regulatory uncertainty. Thus, it calls for regulation that has a neutral impact on competition
between the different groups of providers so that competition can ensure – under the same
regulatory conditions – high-quality long-term financing instruments and the further stability
of the system. The IW analysis shows that banking regulation can give rise to considerable
unintended side-effects as well as impair the potential of covered bonds, too, as an efficient
way to finance growth. Not least of all, the analysis is an appeal to review whether and through
which specific provisions banks today face excessive impediments in performing their traditional economic function.
41
Green Paper on Building a Capital Markets Union
Just after taking up office, the new European Commission announced a further Green Paper
in February 2015: the Green Paper on building a capital markets union.4) At the heart of an
investment offensive to the tune of € 315 billion, the declared chief objectives are to improve
access to financing for small and medium-sized enterprises in particular, to diversify sources
of financing and to boost the efficiency of the capital markets.
The Commission de facto took the aims it had already formulated under the scope of “longterm financing of the European economy” and gave them the new “capital markets union”
heading, after all clearly stating that more efficient capital markets should not replace banks
but complement them. Thus, while at the same time recognizing banks as important providers
of finance to the real economy, in seeking to attract alternative providers of financing the Commission is adopting a complementary and therefore much more realistic approach.
The Green Paper on building a capital markets union contains the following passage with
regard to covered bonds/Pfandbriefe:
“The development of a more integrated European covered bond market could contribute
to cost-effective funding of banks and provide investors with a wider range of investment
opportunities. The success of covered bonds as funding instruments is closely linked with the
development of specific national legal frameworks. The Commission will consult in 2015 on
the merits and potential shape of an EU covered bond framework and present policy options
to achieve greater integration in covered bond markets, based on experience gained from well
Green Paper on building a capital markets union <http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52015DC0063>
4)
functioning national frameworks. The Commission will also reflect on whether investors
should be provided with more information about the collateral underlying covered bonds
and other structured debt, similar to loan data disclosure requirements on structured
finance instruments.”
The European Commission also sees the initiative to create a single legal framework for covered
bonds in Europe as a means of safeguarding the instrument’s high standard of quality. This, in
turn, also allows European legislators to justify affording preferential regulatory treatment to
covered bonds in European banking supervisory law.
Pushing ahead with harmonisation
In view of the above, the Association of Pfandbrief Banks (vdp) signalled some time ago that
it supports this initiative
in principle and suggested areas in which cautious harmonisation
would be appropriate. The comments on the Green Paper on long-term financing of the European economy from 2013 contain initial proposals as to the areas that might meaningfully be
included in a European legal framework. These proposals are still relevant today.
42
Essentially, the vdp advocates minimum harmonisation at a high level. A watering down of
quality must definitely be avoided so as not to jeopardize the preferential regulatory treatment
of covered bonds in the long run. It is crucial in this context that scope be left for specific
national particularities to preserve established structures. Moreover, to safeguard the competition of ideas, measures must be taken which continue to facilitate improvements in quality at
the national level. The challenge, then, is to promote convergence of the national covered bond
systems while maintaining high, common quality standards without at the same time hampering, or even damaging, well-functioning covered bond markets. As far as can be assessed at
present, the European Commission has no intention of doing away with the currently existing
national frameworks or of replacing them with a European instrument.
Whereas the requirements contained in Article 129 of the CRR have already triggered a certain
convergence of the national covered bond regimes, a further-reaching European regulatory
initiative could address the following areas:
Cover assets: It would be useful to formulate, at the European level, criteria to be met by
assets in order to qualify as cover assets. One important aspect here is that cover assets
shall be enforceable as a security over longer maturities. The asset shall be suitable to
serve as a long-term credit security and be appraisable over a longer time-span. Regarding
the latter, foreseeability of values and their evolution are important characteristics in this
respect.
Special supervision of covered bond business: A crucial feature of quality assurance
with regard to covered bonds is the special supervision of covered bond business over
and above general banking supervision. In Germany, such supervision takes the form, for
example, of regular cover checks. Cross-border studies have shown that requirements of
this kind are designed differently in the individual covered bond countries; what is more,
they are also differently implemented. Thus, uniform European rules could generate value
added for the covered bond in this particular context.
Aspects of insolvency law: It will hardly be possible to formulate, at the EU level, detailed
rules on the treatment of cover assets in the event of a covered bond issuer’s insolvency
(such as ring-fencing of the cover pools, provision of liquidity, rights and duties of the
cover pool administrator). However, it might make sense to define a number of guidelines
on how, in the event of insolvency, to shape the relationship between the defaulted bank
and the assets that have been ring-fenced for the covered bond creditors, as well as on the
cover pool administrator’s role in such a case. It might also be helpful to establish rules on
the contingency for triggering insolvency, for instance on the time at which over-indebtedness or the inability to honour payment obligations occurs.
Transparency: Finally, it should be possible to define common, pan-European rules on the
scope and content of information to be given to covered bond investors. Uniform transparency requirements that go beyond the provisions of Article 129 (7) of the CRR with
regard to the composition of the cover pools and their credit-specific characteristics would
undoubtedly give a further boost to the confidence of investors in the European covered
bond market.
Outlook: Consultation Paper on the Harmonisation of Covered Bonds
The European Commission has announced a consultation paper on the harmonisation of
covered bonds for late summer 2015. In the run-up to it, the Commission has signalled that
it will be taking a broad approach. This refers, on the one hand, to the contents of regulation
that might meaningfully be translated into a common European legal framework. There are
indications that the Commission is thinking in terms of the above referenced topics. The best
practice recommendations of the European Banking Authority (EBA) of July 1, 2014 are also
likely to be included in the consultation. In these recommendations, the EBA describes in
clearly structured terms the regulatory aspects of relevance for covered bonds and lays out
suggestions on how national covered bond laws might be improved.
On the other hand, the consultation is expected to address all the available instruments
which might be suitable in creating a joint legal framework, or at least in achieving a closer
convergence of the national covered bond systems. The possibilities here range from a recommendation by the Commission to a 29th Regime, whereby the latter is not clearly defined.
A 29th Regime is usually understood to be a separate European legal framework that exists
alongside national laws and instruments which remain in force unchanged. In the event of
a 29th Regime, complex questions would need to be tackled as regards interfaces between
the European rules and the still applicable national legislations. As far as a 29th Regime for
covered bonds is concerned, such questions would relate to company and insolvency law
or mortgage and enforcement law, to name but a few.
43
Harmonisation of covered bond legislation?
Dr. Otmar Stöcker, vdp, Berlin
The harmonization of Covered Bonds in Europe has been discussed for several decades
and has gained momentum especially since the publication of the Green Book on Long-Term
Finance in Europe by the EC Commission in early 2013. The article summarizes how harmonization could come about technically and how Covered Bonds would be affected by it.
What does harmonisation mean?
EU-harmonisation of covered bond law can be achieved in many ways, among them
44
a) a common understanding of Art. 129 CRR (and Art. 54 IV UCITS directive)
This is necessary in any case and could – at least partially – be achieved via interpretation
by EBA Q & A procedure.
b) regulation of details necessary to achieve a common understanding This could be accomplished including more detail in CRR and UCITS.
c) minimum harmonization
This would mean setting minimum quality standards on cover assets, special public supervision etc. i.e. anything, that could be harmonised without inflicting forced changes upon
existing covered bond models and products.
d) fullly targeted harmonization
Full scale harmonization would not allow or leave room for national laws apart from what
would be EU level regulation. This would imply fundamental changes for most covered
bond models and products and require changing many detail on all outstanding issues.
New cover pools would have to be created and then only new covered bonds could be
issued based on the new law. Issuers would have to manage double amount of cover pools.
Liquidity in the covered bond market would be seriously damaged and hampered for many
years of transition.
It is clear that before any decision on the route to be taken a fundamental analysis of the pros
and cons of each option should be done, especially with a view to the economic costs and
profits involved at EU-, national, and issuer-level. At each level the perspectives of investors,
issuers, supervisors, and the national economy must be adequately reflected.
Which covered bonds would be affected?
EU-harmonisation means equalizing national legal provisions to an extent to be defined on
EU level. Therefore only covered bonds based on statutory law would be covered by a harmonisation, but not contractual covered bonds, because they are out of scope of any harmonization of legal provisions, which are dedicated to (legally regulated) covered bonds.
Effect for public supervision
Special public supervision is one of the most important pillars of the covered bond regulations
in Art. 54 IV UCITS directive and in Art. 129 CRR. This means that governments and supervisory authorities as well as central banks are “responsible” for the successful management
of covered bonds in an issuer’s default. If management should not be successful and covered
bonds were to be affected by an issuer’s default, either the national covered bond law and/
or the supervision was not sufficient – legislation bodies and supervisors did not do their jobs
properly. This responsibility means that they should make up their mind regarding the aim of
covered bonds.
Aim of a covered bond?
For a meaningful harmonization debate, first it is necessary to clearify, what aims a covered
bond should fulfill. Should it
— be just better than a senior unsecured bond?
— safeguard full payment to covered bond investors in case of an issuer’s default and/or
insolvency procedure?
— even safeguard timely payment in that situation?
The aim decides the measures to achieve it, i.e. the areas, which need to be harmonized.
How shall the aim of limiting Asset Encumbrance be dealt with? Regarding the large exposure
regulations, Basel Committee is discussing to set up a minimum OC of 10 % in order to privilege Covered Bonds; should this be used for harmonization purposes as well? How to deal with
liquidity buffers and what for? And how should soft bullet- and pass through-structures that
shift liquidity risks to investors be regarded in this respect, positive or negative?
A realistic harmonisation approach needed
With the aim to protect covered bonds from future harmful developments and to strengthen
the solidity of the product while safeguarding the high level of security of covered bonds for
investors, a prudent and tailor-made harmonization of a certain number of covered bond core
principles could be discussed. Such an approach must materialize as minimum harmonization
at an appropriate level so that the historically rooted diversity of European covered bond systems can be safeguarded.
Appropriate areas for such a prudent approach could be
— eligible asset classes,
— special public supervision,
— valuation of real estate, which is used for mortgage collateral purpose,
— transparency and
— insolvency segregation of cover assets and bankruptcy remoteness of Covered Bonds.
45
Rising Property Prices and the
Implications for Pfandbriefe
Alfred Anner, Bayerische Landesbank
46
When property prices in a country rise over a prolonged period of time, the
risk grows that a crash may follow. This is an experience made by Spain, in
particular, in recent years. In this article we examine how Pfandbriefe are
being affected by the most recent price increases in Germany, which have
been considerable in some regions. In this context we look at how the mortgage lending value concept stipulated in the German Pfandbrief Act protects
investors against price slumps and how the German valuation principles
hold up in comparison with their international counterparties. Additionally,
we show that investors themselves can have an influence on the effects of
a crash in their choice of cover pools or issuers.
German property prices advanced strongly in recent years –
Overheating in major towns and cities
According to figures of the Association of German Pfandbrief Banks (vdp), prices for German
residential and commercial properties continued their upward trajectory in the fourth quarter
of 2014. The vdp property price index for the overall German market is calculated on the basis
of real transaction data. This index rose by 5.0 % as an average for 2014, posting a stronger
rate of increase than in 2013 (+3.9 %). Compared with the beginning of 2010, when the current cycle of price hikes started, German house prices are up by 19.5 % as a national average,
meaning they are almost one-fifth above the level recorded at the beginning of this decade.
This rise in prices was driven primarily by the housing market. In 2014, the vdp’s overall index
for housing gained 5.8 %, compared with a growth rate of only 3.4 % in 2013, and prices
for residential properties went up by 19.7 % from 2010. The relentless increase in housing
prices is mainly attributable to the market for multi-family houses. Compared with the fourth
quarter of 2013, the capital value index climbed by 7.2 %. The vdp ascribes the persistent rise
in prices in this market segment to the consistently brisk demand by private and institutional
investors, and this demand grew even more strongly in the last quarter of 2014 on the back
of the positive environment.
The surge in prices in the commercial property market, on the other hand, lost some of its
momentum. Whereas at the end of 2013 (figures based on a year-on-year comparison in each
case), prices advanced by 5.1 %, they rose by only 3.7 % in the third quarter of 2014 and by
just 2.4 % in the fourth quarter of 2014. This slower pace of growth is due to office property
prices, which rose by a mere 1.9 % year-on-year, while the capital values for office properties
at end-2014 were unchanged compared with the third quarter. In fact, office rents edged up
by a mere 0.2 % compared with the corresponding quarter one year earlier.
47
Figure 1:
Overview of development in prices for German residential and commercial properties
(Q4/2004 – Q4/2014).
vdp overall index:
Owner-occupied housing: condominium prices
considerable rise in property prices since 2010
up by close to 20 % since beginning of 2010
vdp property price indices(2003=100)
Overall Index
Residential
Commercial
Owner Occupied Housing Condominiums
Single-Family Houses
125
130
120
125
115
120
110
115
105
110
100
105
95
100
95
90
Q4.2004 Q4.2006
48
Q4.2008
Q4.2010
Q4.2012
Q4.2004 Q4.2006
Q4.2014
Sources: BayernLB Research; vdp (overall index / overall index
commercial properties: up to 2008, the vdp published only annual
averages)
Q4.2008
Q4.2010
Q4.2012
Q4.2014
Sources: BayernLB Research; vdp
New lease rentals: multi-family houses showing by
Capital values: office properties move
far the highest growth rates for a number of years
sideways of late
Retail Office
Multi-Family Houses
Retail Office
Multi-Family Houses
125
125
120
120
115
115
110
110
105
105
100
100
95
95
90
90
Q4.2004 Q4.2006
Q4.2008
Q4.2010
Q4.2012
Sources: BayernLB Research; vdp (office rents: up to 2008,
the vdp published only annual averages)
Q4.2014
Q4.2004 Q4.2006
Q4.2008
Q4.2010
Q4.2012
Sources: BayernLB Research; vdp (office rents: up to 2008,
the vdp published only annual averages)
Q4.2014
The Deutsche Bundesbank, too, has examined the development of housing prices – not least
in the urban regions, where prices have grown sharply in recent years – and sounded out the
risk of a bubble forming in the German property market.1) Its analysis reveals that the upward
pressure on prices for residential properties in German major towns and cities slipped to 5.25 %
on average according to calculations by bulwiengesa AG, compared with an average of 7.25 %
in 2013. And according to a study carried out by the Institute for Economic Research (IW),2)
prices for existing condominiums, in particular, in Germany’s major towns and cities have
surged strongly since 2010, for example by 39 % in Berlin, by 41 % in Hamburg and by no
less than 47 % in Munich.
In the Bundesbank’s view, the sharp increase in property prices, notably in urban concentrations, over the last few years is to be explained by substantial inflows of immigrants and
by persistently favorable wage and employment prospects. Moreover, it cites low mortgage
interest rates as a driver of this development. During the course of last year, the average mortgage rate contracted by 0.75 percentage point to 2.25 % at year-end. Thus, adjusted for the
expected longer-term inflation rate, the average interest rate on loans for house purchase in
2014 was two percentage points below the 2009 level.
What is more, the Bundesbank still does not consider residential property to be significantly
overvalued for Germany as a whole. Specifically in the major towns and cities, however, it
believes them to be overvalued to the tune of 25 % on average. The vdp expects the high
demand shown by national and international investors for German residential and commercial
properties to continue unabated, and sees the reason for this in a “combination of low interest
rates, high international capital mobility and a relatively stable German economy”.
Deutsche Bundesbank, Monthly Report, February 2015.
Published under
http://www.iwkoeln.de/de/studien/iw-trends/beitrag/michael-schier-michael-voigtlaender-immobilienpreise-210193
1)
2)
49
How the mortgage lending value concept protects investors from price slumps
Of course, investors in German Mortgage Pfandbriefe should, as a general principle, keep an
eye on the development of the prices of the cover assets which guarantee repayment of the
Pfandbriefe. Not surprisingly, German real estate loans play a key role here, accounting for an
average share of 75 % (see the right-hand chart, below). In addition to the general development of German property prices, regional price trends – which, as may currently be seen, can
differ significantly – should also be observed and compared with the regional composition of
the cover pool.
Incidentally, the same also applies to residential and commercial property prices, which generally do not follow the same line of development, and for which cover pool analysis is of
varying degrees of relevance depending on the composition of the cover pools in question
(see Figure 2: the left-hand chart presents the average breakdown of German mortgage cover
pools). This breakdown can differ substantially depending on the issuer’s business model. For
example, Commerzbank, ING DiBa and Wüstenrot each have residential property loans in their
cover pools accounting for more than 90 % of the assets; by contrast, they make up a share of
around or below 15% in the case of Aareal Bank, Deutsche Hypo or Deutsche Pfandbriefbank.
50
Figure 2
Pfandbrief cover pools: residential property loans
Pfandbrief cover pools: focus clearly on
account for largest share
German real estate
Sectoral breakdown within Mortgage Pfandbrief cover pools
Location of cover pool assets by country
Residential 48%
Germany 75%
UK 4%
France 3%
Commercial 43%
Rest of Europe 6%
Others 12%
Others 9%
Sources: BayernLB Research; vdp (figures in % refer to aggregate
cover pool volume of all Pfandbrief issuers reporting to the vdp)
Sources: BayernLB Research; vdp (figures in % refer to aggregate
cover pool volume of all Pfandbrief issuers reporting to the vdp)
Covered bond investors will, of course, keep close track of how the cover assets are developing. But how do rising real estate prices, in particular, affect cover pool valuations with regard
to the requirements of the Pfandbrief Act? And do the provisions of German Pfandbrief legislation differ from those in other legislations? The answer to the first question is relatively simple. According to the Pfandbrief Act, the part of the underlying property loan which is eligible
for inclusion in the cover pool is wholly unaffected by price increases. This is because only
the part of the loan amounting to a maximum of 60 % of the – prudently determined or sustainable – value of the property (known as the mortgage lending value)3) may be included in
the cover pool. As a rule, the mortgage lending value is well below the current market value
and – unlike in other countries – must on no account be indexed to general price developments in the property market.4)
Thus, the Pfandbrief Act can be considered more conservative than many other covered bond
legislations in terms of taking rising property prices into consideration (to answer the second
question that was asked above). That is the result, above all, of the following three arguments.
1 Whereas many countries base valuations on market values,
the conservatively determined
and considerably less fluctuation-prone mortgage lending value creates an additional risk
cushion in times of (sharply) rising property prices.
5)
2 The Pfandbrief Act stipulates a uniform mortgage lending limit of 60 % (for both residen-
tial and commercial mortgage loans); particularly in the case of residential property loans,
this limit is appreciably lower than in most other jurisdictions (generally 80 %).
3 Where use is made of market prices, the volume of assets eligible for inclusion in the cover
pool also increases in times of rising property prices. This is because parts of loans which
were previously above the mortgage lending limit (and were therefore not eligible for inclusion) can then be included in cover. This enables issuers to issue additional covered bonds,
and so to expand refinancing for more real estate lending – in a procyclical way –, which
could in turn contribute to the formation of a real estate bubble.
In this context, please see §16 (2) of the Pfandbrief Act: “The mortgage lending value must not exceed the value resulting from a prudent assessment of the future marketability of a property by taking into account the long-term sustainable aspects of the property, the normal regional market condition as well as the current and possible alternative uses. Speculative elements must not be taken into consideration. The mortgage lending value must not exceed a market value calculated in a transparent manner and in accordance with a recognized valuation method.”
4)
On the other hand, in the event of marked price decreases, the mortgage lending value must be reviewed and lowered if need be,
especially “when the general price level in the respective regional property market has fallen to an extent that jeopardizes the safety of the lending” (§26 Regulation on the Determination of the Mortgage Lending Values of Properties).
5)
Market values are used as a measure for valuing the real estate loans included in cover in countries such as, for instance, Australia, Belgium, Finland, Italy Canada, New Zealand, the Netherlands, Norway, Sweden and the UK.
3)
51
How high is the cushion that results from using the mortgage lending value,
and what factors does its size depend on?
It is, moreover, interesting for investors to know the size of this cushion which results from
using the mortgage lending value, i.e. to know how far mortgage lending values are below
market values. We know of no study for residential properties that considers this question.
However, in an empirical study published last year,6) Fitch examines the difference between
the mortgage lending value anchored in German Pfandbrief legislation and the market value of
German commercial properties, bringing to light a variety of practices in the valuation of different types of buildings and of use. The findings will be of informational value to investors.
First of all, Fitch ascertained for a total of 7,493 representative German commercial properties which are distributed evenly across Germany and were included in the cover pools rated
by Fitch that, at the end of the first quarter of 2013, the mortgage lending values of these
properties were, on average, 12 % below the prevailing market values at that time. This 12 %
cushion, which is likely to have risen further following the property price increases of the last
two years, implies therefore that – besides the maximum mortgage lending limit of 60 % –
Pfandbrief investors enjoy an additional safeguard in that the mortgage lending limit (eligibility threshold) is lowered, as it were, by 12 % from 60 % to 53 %. This means that, proceeding
from the current market value, the underlying properties could shed not just 40 % but 47 %
of their value before the loans in the cover pool were no longer covered by the value of the
properties.
52
So much for the average difference. Fitch also found out that the size of the market value cushion
(i.e. the difference between the mortgage lending value and market value) depends, above all, on
the type of use to which the property in question is put. The cushion came to 18 % and 13 % for
riskier types of use such as office or retail, respectively, compared with 10 % for lower-risk types
of use such as multi-family houses. This is probably due to the fact that income flows from office
or wholesale and retail properties have to be valued more conservatively, as the rental income is
generally considered to be substantially more volatile or uncertain compared with multi-family
dwellings. For a more detailed picture of the cushions, which can vary by as much as 10 percentage points, please see Figure 3 (below), which also provides a breakdown of the different types
of use by market value.
Fitch discovered, moreover, that Pfandbrief issuers do not all interpret the mortgage lending
value concept in the same way, particularly since the outbreak of the global financial crisis; nor
could this be explained by different property portfolios. Calculated since 2007, the market value
cushion in the case of “more cautious” issuers is, at 17 %, on average 5 percentage points higher
than for “more optimistic” issuers (12 %). By contrast, the differences were minimal prior to
the crisis.
See “Market vs. Mortgage lending values in Pfandbriefe” of February 3, 2014.
6)
Figure 3:
Market value cushions in the case of different types of use and market values (MV)
(in %)
Type of building
Small Small-moderate
MV< 5 million MV< 10 million
Moderate-large
Large
MV< 50 million MV> 50 million
Average
Office
20
16
16
20
18
Multi-family houses
10
11
12
11
10
Retail
12
15
16
18
13
– shopping malls
11
13
15
15
12
Average
12
13
15
19
12
Sources: BayernLB Research; Fitch
Evidently, some issuers base their assessments on more conservative assumptions than others.
This shows once again that not only the cover pool analysis but also the assessment of the issuer
and the issuer’s lending process ought to be a key component when analyzing Pfandbriefe and
covered bonds.
Conclusion
The pronounced price increases witnessed in a number of regions and major towns and cities
of Germany in recent years will have only limited implications for Pfandbriefe. Above all, this is
owed to the mortgage lending value concept an-chored in the German Pfandbrief Act, because
it means that price increases in the past are “put aside” as a valuation cushion for a downturn
in prices in the future. After all, only the part of a loan amounting to a maximum of 60 % of
the – prudently determined or sustainable – value of a property may be included in the cover
pool. Unlike in other countries, this mortgage lending value must on no account be indexed to
general property market price developments.
In addition, this conservative German valuation approach, which is geared to the formation
of risk cushions, relativizes the extent to which the German property boom might negatively
impact on Pfandbriefe. The bottom line is that Pfandbrief investors in Germany enjoy considerably better protection than in many other countries.
53
vdp Member Institutions
54
54
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
Aareal Bank | Wiesbaden
BayernLB | Munich
Berlin Hyp | Berlin
Bremer Landesbank | Bremen
Commerzbank | Frankfurt am Main
DekaBank | Frankfurt am Main
Deutsche Apotheker- und Ärztebank | Düsseldorf
Deutsche Genossenschafts-Hypothekenbank | Hamburg
Deutsche Hypothekenbank | Hanover
Deutsche Kreditbank | Berlin
Deutsche Pfandbriefbank | Unterschleissheim
Deutsche Postbank | Bonn
Dexia Kommunalbank | Berlin
Düsseldorfer Hypothekenbank | Düsseldorf
DVB Bank | Frankfurt am Main
Hamburger Sparkasse | Hamburg
HSH Nordbank | Hamburg
ING-DiBa | Frankfurt am Main
Kreissparkasse Köln | Cologne
Landesbank Baden-Württemberg | Stuttgart
Landesbank Berlin | Berlin
Landesbank Hessen-Thüringen (Helaba) | Frankfurt am Main
M. M. Warburg & CO Hypothekenbank | Hamburg
Münchener Hypothekenbank | Munich
National-Bank | Essen
Natixis | Frankfurt am Main
Nord/LB Norddeutsche Landesbank Girozentrale | Hannover
PSD Bank Nürnberg | Nuremberg
SaarLB Landesbank Saar | Saarbrücken
Santander Consumer Bank | Mönchengladbach
SEB | Frankfurt am Main
Sparkasse KölnBonn | Cologne
UniCredit Bank HypoVereinsbank | Munich
Valovis Bank | Essen
WL BANK Westfälische Landschaft Bodenkreditbank | Münster
Wüstenrot Bank Pfandbriefbank | Ludwigsburg
55
Shareholders:
Aareal Bank AG
Paulinenstrasse 15, 65189 Wiesbaden
Tel.: +49 611 348-0, Fax: +49 611 348-2549
www.aareal-bank.com
Shareholder structure
Shareholder structure as at December 31, 2014
since February 3, 2015:
Aareal Holding Verwaltungsgesellschaft mbH 28,9%
– 6,9 % Bayerische Beamten Lebensversicherung a.G.
100 % Free float
– 6,9 % Swiss Life AG
– 5,2 % Versorgungsanstalt des Bundes und der Länder
– 4,7 % Dr. August Oetker Finanzierungs- und
Beteiligungsgesellschaft mbH
– 2,7 % Basler Lebensversicherungs-AG und
Basler Sachversicherungs-AG
– 1,4 % Deutscher Ring Krankenversicherungsverein a.G.
– 1,1 % Condor-Lebensversicherungs-AG
Free float (reminder)
Aareal Bank Group, headquartered in Wiesbaden, Germany, is one of the leading international property
specialists. It is active across three continents - in Europe, North America and Asia.
Aareal Bank has a broad and solid refinancing base. It has established itself as an active issuer of Pfandbriefe (German covered bonds), which account for a major share of the bank's long-term funding. To cater
to a broad investor base, Aareal Bank covers a wide range of other refinancing tools, including promissory
notes and debt securities. Its capital market activities focus on private placements. These are complemented by larger, public placements that are issued depending on market conditions. In addition, the bank
generates deposits from its long-term business relationships with companies from the institutional housing
industry, and with institutional investors.
The successful activities on the capital and money markets , as well as the business with institutional housing industry clients, is based on the combination of a sustainable business model, a deep understanding of
the capital markets, and the quality of Aareal Bank’s property financing portfolio.
Rating:
Fitch
Public Pfandbriefe
Mortgage Pfandbriefe
AAA
AAA
Selected key figures
56
Total assets
Mortgage loan portfolio
of which cross-border
Mortgage loan commitments
Public-sector loan portfolio
Public-sector loan commitments
Total funds outstanding (registered and bearer bonds)
Public Pfandbriefe
Unsecured bonds Jumbo issues outstanding
Benchmark issues outstanding
Refinancing funds raised
Public Pfandbriefe
Promissory notes
Unsecured bonds
Subordinated liabilities
Own funds as shown in the balance sheet – total –
Core capital (without net income)
Profit-sharing capital
Net interest income
Administrative expenditure
Operating result before provisions for risks
Provisions for risks
Operating result after provisions for risks
Income for the year
2014
€ million
2013
€ million
49,557
28,987
22,894
10,666
9,545
2,634
699
n. s.
n. s.
42,981
24,550
20,802
10,477
8,975
2,534
691
n. s.
n. s.
12,767
2,285
13,622
0
4,375
10,551
2,257
11,923
0
4,375
1,847
15
1,068
71
913
3,896
2,407
73
1,222
688
439
582
146
436
316
2,794
0
827
159
103
3,249
2,333
166
524
527
375
311
113
198
117
Presence in electronic media: Reuters: ARLG.DE; Bloomberg: ARL Contacts:
Thierry Nardon, Head of Treasury
Tanja Stephan, Asset-Liability-Management
Michael Hamp, Head of Money Markets
Tobias Engel, Head of Capital Markets
Jan Siemon, Capital Markets
Jürgen Junginger, Head of Investor Relations
Tel.: +49 611 348-3001
Tel.: +49 611 348-3883
Tel.: +49 611 348-3861 Tel.: +49 611 348-3851
Tel.: +49 611 348-3852
Tel.: +49 611 348-2636
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
BayernLB
Brienner Strasse 18
80333 Munich
Tel.: +49 89 2171-01
Fax: +49 89 2171-23578
www.bayernlb.de
Owners:
Free State of Bavaria (75.01 %)
Association of Bavarian Savings Banks (24.99 %) BayernLB is one of Germany’s leading commercial banks, located in one of Europe’s strongest economic
regions. Our clients include large corporates and financial institutions, Mittelstand companies and almost
every savings bank in Germany. BayernLB is well-positioned in retail banking through its DKB subsidiary.
Financing activities for the public sector and institutional investors are focused on BayernLB’s core
markets Bavaria and the rest of Germany. BayernLB is an established issuer of capital market products.
The Bank provides investors with a broad spectrum of instruments, ranging from senior unsecured debt
and Pfandbriefs to Schuldscheins and different types of finance and structured solutions (private placements, benchmark issues). Its public sector and mortgage Pfandbriefs make BayernLB one of Germany´s
top issuers.
Rating: Fitch
Moody‘s
IMUG
Public Pfandbriefe
AAA
Aaa
Neutral (CCC)
AAA
Aaa
Positive (BBB)
Total assets
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds Subordinated liabilities
Net interest income
Net income/loss for the financial year
2014
€ million
2013
€ million
178,132
15,196
33,545
54,783
5,241
18,320
31,222
4,250
2,000
5,797
129
2,150
3,518
0
14,817
9,173
357
4,332
1,408
-895
640
-1,532
-892
-2,114
201,035
14,516
35,947
64,479
6,454
21,161
36,864
7,125
1,000
6,233
544
2,047
3,642
0
18,208
12,134
440
4,413
1,349
-1,022
705
-506
199
-475
Presence in electronic media: www.bayernlb.de, Bloomberg: BAYL, Reuters: BAYLB
Contacts:
Josef Gruber
Head of Group Treasury
Tel.: +49 89 2171-25438
[email protected]
Dr. Jörg Senger
Head of Capital Markets Tel.: +49 89 2171-26524
[email protected]
Petra Trinkies
Head of Finance
Tel.: +49 89 2171-27278
[email protected]
57
Berlin Hyp AG
Budapester Strasse 1
10787 Berlin
Tel.: +49 30 2599-90
Fax: +49 30 2599-9131
www.berlinhyp.de
Shareholder:
Landesbank Berlin Holding AG (100 %)
Berlin Hyp is one of the leading financiers of commercial real estate in Germany. The company finances residential and mixed use properties, as well as offices, retail and logistics properties. It offers finance for individual
buildings and high-volume portfolio transactions. In co-operation with its clients Berlin Hyp tailors creative and
innovative financing models to their individual needs, including complex project finance. The bank's clients
include professional investors from Germany and abroad, housing societies, property funds, investment companies, and other institutional investors, as well as selected construction companies and developers. In addition the bank acts as a partner of the German savings banks concerning commercial real estate finance,
and offers them a broad range of products and services. Berlin Hyp's headquarters are located in Berlin. Four further locations in Germany’s most important property
markets, as well as representative offices in selected European countries ensure that the bank is always close to
its clients.
Rating: Mortgage Pfandbriefe
Public Pfandbriefe
Senior Unsecured
Short-Term
Viability/Adj. BCA
Fitch
Moody‘s
AA+
Aaa
AA-
Aa1
A+
A2 (neg.)
F1+
Prime-1 (neg.)
bbbbaa3
58
Total assets
Residential loans (commercial)
Commercial loans
Residential loans (commercial)
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
2014
€ million
2013
€ million
30,428
18,113
6,096
12,017
4,484
5,041
2,319
2,722
776
3,329
433
0
0
22,808
10,680
3,285
8,843
3,695
3,200
4,909
2,540
0
1,586
630
153
1,402
936
0
466
219
112
130
9
122
0
33,367
18,108
6,551
11,557
4,014
4,478
1,178
3,300
937
3,492
446
0
0
22,757
11,053
4,647
7,057
5,576
1,200
3,793
2,180
0
973
640
0
1,182
831
0
351
202
84
139
20
119
0
Presence in electronic media: Reuters: BLNHYP01 f., www.berlinhyp.de
Contacts:
Sven Schukat, Head of Treasury
Thomas Meister, Deputy Head of Treasury
Bodo Winkler, Head of Investor Relations
+49 30 2599-9510
+49 30 2599-9513
+49 30 2599-9521
[email protected]
[email protected]
[email protected]
Bremer Landesbank
Owners:
Kreditanstalt Oldenburg - Girozentrale NORD/LB Norddeutsche
Domshof 26, 28195 Bremen Landesbank -Girozentrale- (54.8 %)
Tel.: +49 421 332-0
Freie Hansestadt Bremen (41.2 %)
Fax: +49 421 332-2322 Sparkassenverband
E-mail: kontakt@ bremerlandesbank.de Niedersachsen (4.0 %)
www.bremerlandesbank.de Specialised, uncomplicated and always treating the customer as its equal: that’s Bremer Landesbank
(BLB). With its proven track record in international capital markets and in-depth industry expertise, the
Bank supports companies and private customers in the north-west of Germany with first-class solutions
for financing and asset protection. As the only bank in the region with its own commercial centre, Bremer
Landesbank offers its customers exclusive access to the international finance and capital markets. With
over 1,000 competent employees in Bremen and Oldenburg and a business volume of more than € 34 billion, Bremer Landesbank is one of the leading banks in the north-west of Germany. Its owners are Norddeutsche Landesbank with 54.8%, the state of Bremen with 41.2% and the Lower Saxony Association of
Savings Banks with 4.0%.
Rating: Public
Pfandbriefe
Short-term liabilities
Long-term
liabilities
Viability
rating
Fitch
-
F1
A-
bb
Total assets
Mortgage Pfandbriefe incl. Ship Pfandbriefe1)
Public Pfandbriefe2) Unsecured bonds Jumbo issues outstanding
Mortgage Pfandbriefe incl. Ship Pfandbriefe
Public Pfandbriefe
Unsecured bonds Promissory notes
Net interest income
Operating result before risk provisions and valuation
Operating result after risk provisions and valuation
Income for the year
2014
€ million
2013
€ million
31,244
1,609
4,963
32,235
1,633
4,697
1,045
3,717
6,907
0
0
1,208
3,822
7,235
0
0
126
563
704
104
0
126
661.3
602
55
50
1,937
0
628,7
403,5
-192,4
248,8
-222,9
19,7
0
1,885
0
660
407.7
-191.9
278.6
-224.6
47.8
36
not including Mortgage Pfandbriefe issued before 18 July 2005 at € 5 mn. at end-2014 and € 14 mn. at end-2013.
not including Public Pfandbriefe issued before 18 July 2005 at € 835 mn. at end-2014 and € 1,561 mn. at end-2013.
1)
2)
Presence in electronic media: Reuters: BREMERLB01, www.bremerlandesbank.de
Contacts:
Kay Fischer, Leiter Handel/Sales
Tel.: +49 421 332-2929
[email protected]
Thorsten Kirchhoff, Tel.: +49 421 332-2272
Leiter Geld-, Devisen-, Derivate- und Rentenhandel
[email protected]
Fred Walther, Leiter Investor Relations
[email protected]
Tel.: +49 421 332-2453
59
Commerzbank AG
Kaiserplatz
60261 Frankfurt am Main
Tel.: +49 69 136-20
Fax: +49 69 136-29492
www.commerzbank.com
Shareholders:
Institutional Investors (~ 50 %)
Private Investors (~ 25 %)
Federal Republic of Germany (>15 %)
Capital Group (< 5 %)
BlackRock (> 5 %)
As of June 2015
Commerzbank is a leading bank in Germany and Poland. It is also present worldwide in all markets for its
customers as a partner to the business world. With the business areas Private Customers, Mittelstandsbank,
Corporates & Markets and Central & Eastern Europe, it offers its private and corporate clients as well as institutional investors banking and capital market services. In total, Commerzbank boasts approximately 15 million
private customers, as well as 1 million business and corporate clients.
Commerzbank issues Pfandbriefe under its own name. Our Mortgage Pfandbriefe are secured by German residential mortgages. The Commerzbank Public Sector Pfandbriefe are used to refinance export credit agency
lending, specifically export loans originated by our MSB and guaranteed by Euler Hermes. Through the
issuance of Pfandbriefe Commerzbank has been able to significantly expand its long term funding sources.
Hypothekenbank Frankfurt, a Commerzbank subsidiary, has EUR 17,1 billion Mortgage and EUR 14,4 billion
Public Sector Pfandbriefe outstanding.
Rating: Fitch
Moody‘s
Standard & Poor‘s
Long-term liabilities
Public Pfandbriefe
BBB Baa1
BBB+
AAA
Aaa
–
AAA
Aaa
–
As of June 2015
60
Group total assets
Residential loans (AG1)
Public-sector loan portfolio2) (AG)
AG's borrowings outstanding (registered and bearer bonds)
Mortgage Pfandbriefe2)
Public Sector Pfandbriefe2)
Ship Pfandbriefe2)
Unsecured bonds, promissory notes
Jumbo issues outstanding (AG)
AG's benchmark issues outstanding (nominal)
AG's secured/unsecured debt raised (nominal)
Public Sector Pfandbriefe
Ship Pfandbriefe
Structured Covered Bonds
Unsecured bonds, promissory notes
Group own funds (as shown in the balance sheet) – total –
Group net interest income
Group administrative expenditure
Group operating result before risk provisions
Group risk provisions
Group operating result after risk provisions
Group income for the year
2014
€ million
2013
€ million
557,609
44,586
0
2,397
250
549,661
39,809
0
2,242
105
2,000
2,003
2,074
25,598
0
3,000
1,000
1,536
2,716
34,108
0
1,500
1,000
500
0
0
2,957
39,318
26,960
12,358
5,607
6,926
1,767
-1,144
623
264
1,000
500
0
500
2,456
40,650
26,936
13,714
6,148
6,797
1,979
-1,747
232
78
Commerzbank Aktiengesellschaft
according to §28 Pfandbrief act
1)
2)
Presence in electronic media: Reuters: CBKD.DE, Bloomberg: CBK.GR
Contacts:
Michael Klein, Inst. Investors and Financial Analysts
Maximilian Bicker, Inst. Investors and Financial Analysts
Franz-Josef Kaufmann, Deputy Head of Cap. Mgmt. & Funding
Manfred Bier, Head of Treasury HF/CISAL/DSB
Tel.: +49 69 136-24522
Tel.: +49 69 136-28696
Tel.: +49 69 136-81109
Tel.: +49 69 136-81105
[email protected]
[email protected]
[email protected]
[email protected]
DekaBank Deutsche Girozentrale
Mainzer Landstrasse 16
Tel.: +49 69 7147-0
Fax: +49 69 7147-1376
www.dekabank.de
Owners:
DSGV ö.K. (50 %)
Deka Erwerbsgesellschaft mbH
& Co. KG (50 %)
DekaBank is the “Wertpapierhaus” – the Provider of Asset Management and Capital Market Solutions – in
the German Savings Banks Finance Group. As a central institution, DekaBank combines expertise in asset
management and banking. DekaBank operates as asset manager, financer, issuer, structurer and custodian. With total customer assets of approximately € 220 billion, Deka Group is ranked amongst Germany’s
largest financial service providers, offering a wide range of investment vehicles to private and institutional
investors. DekaBank was granted a licence from the German Federal Financial Supervisory Authority
(BaFin) to issue public Pfandbriefe and mortgage Pfandbriefe.
Rating: Mortgage
Pfandbriefe
Public
Pfandbriefe
Short-term
liabilities
Long-term
liabilities
Financial
strength
Moody’s
–
Aaa
P-1
A1
–
Standard & Poor‘s
–
AAA
A-1
A
–
2014
€ million
2013
€ million
113,175
5,958
5,958
5,071
2,601
2,601
2,429
34,106
2,877
38,019
115
4,437
33,467
0
0
6,577
30
206
4,499
1,550
292
4,520
4,558
1,171
52
326
1,010
885
-4
872
541
116,073
6,065
6,065
5,164
1,758
1,758
1,555
34,171
2,398
42,230
85
7,583
34,562
0
1,090
4,985
60
254
3,336
1,222
113
3,824
3,709
1,410
52
376
937
895
-27
518
502
Total assets
Commercial loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Capital and reserves*
Equity (without accumulated profit/loss)
Subordinated capital
Atypical silent capital contributions
Net interest income
Net commission income
Administrative expenses
Provisions for loan losses
Net income before tax
Economic result
*
Regulatory ratios as at 31 December 2014 shown in accordance with CRR/CRD IV, as at 31 Decenber 2013 with CRD III
Presence in electronic media: Reuters: DGZ01 / Bloomberg: DEKA / www.dekabank.de
Contacts:
Ralf Paulsen, Head of Funding & Capital Management
Tel.: +49 69 7147-2872
[email protected]
Andreas Bamberg, Head of Funding
Tel.: +49 69 7147-2696
[email protected]
61
Deutsche Apothekerund Ärztebank eG
Richard-Oskar-Mattern-Strasse 6
40547 Düsseldorf
Tel.: +49 211 5998-0
Fax: +49 211 5938-77
www.apobank.de
Owners:
105,864 members
By health care professionals for health care professionals – Deutsche Apotheker- und Ärztebank (or “apoBank” for short) has remained true to this principle for more than 110 years. The bank is a competent
partner for financing high quality, residential properties as well as investment properties for its clients in
the course of its integrated advisory approach. If necessary fully debt financed. In the commercial area a
growing number of initiators of several forms of health care concepts trust in apoBank’s long-term sectorspecific expertise in the health care market. Besides typical properties in the health care sector (e.g. health
centres, medical specialist centres) apoBank is partner for the financing of hospitals as well as of rest
homes. The bank provides as financing products classical fixed rate loans and so called Zinscap-Darlehen
(loans with a cap and a floor) as well as foreign exchange loans.
Rating: Fitch
Moody‘s
Standard & Poor‘s
Mortgage-
Pfandbriefe
Public
Pfandbriefe
–
–
–
AAA
–
–
Others
AA- (Grouprating)
Aa2 (Deposit LT)/ Aa3 Senior unsecured
AA-
2014
€ million
Balance sheet total
Loans and advances to customers
62
thereof: Mortgage loans
thereof: Local authority loans
thereof: Other receivables
New loan agreements
Total funds outstanding (registered and bearer bonds)1)
thereof: Mortgage Pfandbriefe
thereof: Unsecured bonds thereof: Promissory notes
Jumbo issues outstanding
Refinancing funds raised1)
Liable equity capital
including: core capital
Net interest income
General administrative expenses2)
Profit before risk provisioning
Risk costs and provisioning measures for the customer lending business3)
Risk costs and provisioning measures for financial instruments and participations3)
Net income after tax
35,129
27,037
6,295
93
20,648
5,213
6,501 1,247 2,082 3,172 – – 1,126 210 881 35 2,340
1,890
698
124
479
337
78
50
55
2013
€ million
34,695
26,794
6,522
45
20,227
5,624
7,641 1,144 2,854 3,644 – – 1,301 290 990 21 2,499
1,849
679
104
461
315
54
55
47
Excluding subordinated capital
Including depreciation
3)
Including general value adjustments and provisioning reserves pursuant to Section 340f
of the German Commercial Code (HGB) as well as extraordinary espenses
1)
2)
Presence in electronic media: www.apobank.de
Contacts:
Cassie Kübitz-Whiteley
Leiterin Unternehmenskommunikation
Tel.: +49 211 5998-9809
[email protected]
Alexander van Echelpoel Leiter Treasury
Tel.: +49 211 5998-9750
[email protected]
Michael Grimm Leiter Refinanzierung
Tel.: +49 211 5998-9772
[email protected]
Barbara Zierfuß Tel.: +49 211 5998-4687
[email protected]
Investor Relations, Mitgliederbetreuung
Deutsche GenossenschaftsHypothekenbank AG
Rosenstrasse 2
20095 Hamburg
Tel.: +49 40 3334-0 Fax: +49 40 3334-1111
www.dghyp.de
Shareholder:
DZ BANK AG (100 %)
DG HYP is a specialist in commercial real estate lending and ranks among Germany’s leading mortgage
banks. As the biggest mortgage bank in the Cooperative Financial Services Network, it has attractive
financing solutions to offer business investors and public authorities and supports the local cooperative
banks in their regional markets. Our outstanding funding base via the Pfandbrief and the involvement in
the Cooperative Financial Services Network form the strong foundation of our business model.
Rating: Mortgage
Pfandbriefe
Public
Pfandbriefe
Short-term
liabilities
Long-term
liabilities
Outlook
Fitch
-
-
F1+
AA-
stable
S&Ps
AAA
AAA
A-1
A+
stable
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
2014
€ million
2013
€ million
42,912
18,460
5,863
12,597
1,623
4,941
691
4,250
232
16,659
5,843
359
0
25,133
10,873
13,894
366
3,500
1,000
3,539
1,502
0
7
2,030
0
1,859
1,407
452
264
118
177
-24
153
0
49,716
19,576
6,417
13,159
2,101
5,378
791
4,587
51
19,903
7,297
438
0
28,832
11,593
16,751
488
5,000
500
3,272
1,804
0
133
1,335
0
1,912
1,407
505
251
117
180
84
264
0
Presence in electronic media: Reuters: DGHYP
Contact:
Patrick Ernst, Head of Treasury
Tel.: +49 40 3334-22 05
[email protected]
63
Deutsche Hypothekenbank
(Actien-Gesellschaft)
Osterstrasse 31
30159 Hanover
Tel.: +49 511 3045-0
Fax: +49 511 3045-459
www.deutsche-hypo.de
Shareholder:
NORD/LB
Norddeutsche Landesbank Girozentrale (100 %)
Deutsche Hypothekenbank (Actien-Gesellschaft) – a member company of the NORD/LB Group – is a Pfandbrief bank specialising in the financing of commercial real estate finance and capital market business with
clients in Germany and abroad. Founded in 1872, Deutsche Hypo has its headquarters in Hanover, with
branch operations in Hamburg, Frankfurt am Main and Munich, as well as in Amsterdam, London, Paris
and Warsaw. In capital market business, the bank offers investors an extensive range – from tailor-made
issues to benchmark Pfandbriefe.
Rating: Mortgage
Pfandbriefe
Public
Pfandbriefe
Short-term
liabilities
Long-term
liabilities
Basline Credit
Assessment (BCA)
Moody’s
Aa1
Aa1
P-2
A3
b1
64
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
2014
€ million
2013
€ million
30,055
12,410
1,543
10,867
4,599
3,610
768
2,842
1,493
15,432
7,669
170
132
22,341
8,744
8,633
4,963
1,250
3,600
2,852
1,614
0
1,239
0
0
1,337
913
83
326
222
70
104
62
41
0
31,275
11,932
1,372
10,560
4,341
2,662
426
2,236
563
17,423
8,247
1,180
0
25,250
8,648
10,813
5,789
2,250
2,850
3,266
2,725
0
541
0
0
1,347
913
83
336
210
69
148
83
64
0
Presence in electronic media: Reuters: DHHB01; Bloomberg HHY
Contacts:
Dirk Schönfeld
Head of Treasury
Tel.: +49 511 3045-204
Jürgen Klebe
Deputy Head of Treasury
Tel.: +49 511 3045-202
[email protected]
[email protected]
Simone Huch
Investor Relations
Tel.: +49 511 3045-583
[email protected]
Deutsche Kreditbank AG
Taubenstrasse 7–9
10117 Berlin
Tel.: +49 30 120300-00
E-mail: [email protected]
www.dkb.de
Owner:
BayernLB (100 %)
Deutsche Kreditbank AG (DKB) has been part of the BayernLB Group since 1995. The Berlin-based bank
increased its total assets to EUR 70.4 billion in FY 2014. With more than three million retail customers,
DKB is one of the largest online banks in Germany. In addition, its strategic focus also includes business
customers in selected promising and sustainable sectors exclusively in Germany. For example, it finances
the construction of homes for the elderly, family housing, energy-efficient homes, in and out-patient clinics, schools and kindergartens. It also helps ensure the competitiveness of local agriculture by financing
investments in agro-business infrastructure and biogas. Since 1996, DKB has financed numerous renewable energy projects in the wind, solar and hydro-power sectors. DKB has been an issuer on German capital markets for years. The outstanding volume of German covered bonds (Pfandbriefe) backed by publicsector assets or mortgages has risen continuously and amounted to EUR 8.9 billion on 31 December 2014.
DKB regularly issues both bearer and registered covered bonds in the 5 to 15-year range.
Public Pfandbriefe
Moody‘s
Aaa
Aaa
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
Presence in electronic media: www.dkb.de
Contacts:
Thomas Pönisch
Tel.: +49 30 12030-2900
[email protected]
Armin Hermann
Tel.: +49 30 12030-2920
[email protected]
2014
€ million
2013
€ million
70,414
32,827
27,401
5,426
0
2,146
1,565
582
0
14,333
635
2,638
235
8,911
4,143
4,768
0
0
2,550
69,028
33,576
28,089
5,487
0
1,714
1,155
559
0
12,548
365
2,405
365
9,286
3,416
5,370
500
0
2,550
1,613
569
0
0
0
2,949
2,336
22
591
674
315
328
123
205
205
433
523
0
0
0
2,842
2,336
18
488
610
291
229
90
139
139
65
Deutsche Pfandbriefbank AG
Freisinger Strasse 5
85716 Unterschleissheim
Tel.: +49 89 2880-0
Fax: +49 89 2880-10319
e-mail: [email protected]
www.pfandbriefbank.com
Shareholders:
Hypo Real Estate Holding AG (20 %)
Free float (80 %)
pbb Deutsche Pfandbriefbank is a specialist bank for commercial real estate finance and public investment
finance. Together with Germany, pbb’s focus is on Great Britain, France, the Nordic countries and selected
countries in Central and Eastern Europe. The bank has an important role to play in supplying credit to the real
estate industry and supports the public sector with financing for projects and measures designed to improve
public infrastructure. In the field of real estate financing, the Group’s range of services is targeted at professional national and international real estate investors such as real estate companies, institutional investors and
real estate funds. In Germany, the bank also targets medium-sized and regionally orientated clients. In public
investment finance, pbb finances projects providing public-sector infrastructure. In this particular field, the
focus is on public-sector facilities, municipal housing, utilities and the waste disposal industry, healthcare,
nursing and child-care facilities, as well as educational facilities.
Ratings:
(As of June 30, 2015) Mortgage
Pfandbrief
Public Sector Pfandbrief
Short-term
liabilities
S&P
AA+*
AA+*
BBB**
A-2
DBRS
A (low)***
R-1 (low)***
Moody's
Aa2
Aa1
* Outlook Negative ** Outlook Developing *** Under Review Negative
Selected key figures (HGB)
66
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income*
General administrative expenses*
Provisions for losses on loans and advances*
Pre-tax Profit*
Net income*
Net income (adjusted)**
2014
€ million
2013
€ million
65,631
21,798
4,407
17,391
11,000
8,994
1,394
7,600
4,828
15,577
8,445
1,168
1,109
44,280
15,475
21,397
7,408
5,250
6,975
6,031
3,644
311
880
1,196
0
5,290
4,018
0
1,272
421
-251
-21
54
4
116
68,443
20,527
4,786
15,741
9,523
6,907
1,350
5,558
3,229
16,016
7,530
1,224
933
46,729
14,718
23,976
8,035
8,000
4,975
7,706
3,244
1,241
1,803
1,418
0
7,227
5,789
0
1,438
319
-312
-8
165
160
160
*Deutsche Pfandbriefbank group, in accordance with IFRS
**Without the valuation adjustment of Heta Asset Resolution AG (Heta) exposure
Presence in electronic media: Bloomberg: PBBA
Contacts:
Götz Michl Funding / Debt Investor Relations Tel.: +49 6196 9990-2931 [email protected]
Silvio Bardeschi Funding / Debt Investor Relations Tel.: +49 6196 9990-2934 [email protected]
Walter Allwicher Corporate Communications
Tel.: +49 89 2880-28787 [email protected]
Shareholders:
Deutsche Bank AG (96.8%)*
Free Float (3.2 %)
Deutsche Postbank AG
Friedrich-Ebert-Allee 114-126
53113 Bonn
Tel.: +49 228 920-0
www.postbank.de
*Source: Deutsche Bank
With around 14 million clients, 15,000 employees and total assets amounting to €155 billion, Deutsche
Postbank Group is one of Germany's largest financial service providers. It focuses on business with private
customers and with small and medium-sized companies. At its own 1,100 branches it offers extensive financial services as well as postal services. About 3,000 mobile are active primarily in private home finance and
retirement provisions. Postbank is among Germany’s leading home finance providers. Since early 2008 it
issues Mortgage Pfandbriefe. The collateral pool almost exclusively consists of German residential mortgage
loans. Since July 2009 Postbank additionally issues Public Pfandbriefe. Deutsche Bank owns 96.8 % of
Postbank's shares.
Public Pfandbriefe
Fitch
AAA
–
Selected key figure*
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Own funds as shown in the balance sheet – total –**
Net interest income**
Administrative expenditure**
Operating result before provisions for risks**
Provisions for risks**
Operating result after provisions for risks**
Income for the year**
2014
€ million
2013
€ million
155,447
46,727
35,006
11,720
3,225
3,441
3,197
244
0
3,628
33
990
0
18,213
4,754
268
12,241
950
3,000
0
0
0
0
0
0
10,000
6,323
1,091
2,586
2,508
-2,729
287
-265
22
278
161,497
46,780
35,697
11,082
3,865
4,675
3,147
1,528
477
3,672
33
1,019
0
22,616
5,764
1,978
13,730
1,144
5,500
0
0
0
0
0
0
10,153
5,817
1,196
3,140
2,463
-3,459
363
-319
44
330
*according to German Commercial Code
**according to IFRS consolidated group accounts
Presence in electronic media: POBA01ff/ Bloomberg: POBA/ www.postbank.de
Contacts:
Thomas Lippmann, Group Treasury
Fixed Income Investor Relations
Tel.: +49 228 920-53240
Tel.: +49 228 920-18003
[email protected]
[email protected]
67
Dexia Kommunalbank Deutschland AG
Charlottenstrasse 82
10969 Berlin
Tel.: +49 30 25598-0
Fax: +49 30 25598-200
Shareholder:
Dexia Crédit Local (100 %)
www.dexia.de
Dexia Kommunalbank Deutschland is a wholly owned subsidiary of Dexia Crédit Local, the main company of the
Belgian-French Dexia Group.
It was founded in 1991 as a specialist bank focusing on German public-sector finance.
For refinancing their assets, Dexia Kommunalbank Deutschland issues Public Pfandbriefe and occurs as a regular issuer of Public Pfandbriefe in benchmark format. In addition, the Bank offers a wide range of attractive products as cash and time deposits.
Rating: Standard & Poor‘s
68
Public Pfandbriefe
A (stable outlook)
Total assets
Public Pfandbriefe
Net interest income
Income for the year
2014
€ million
2013
€ million
36,737.8
0
0
24,149.9
8,213.5
25.3
0
39,545.7
0
0
26,124.7
8,492.9
68.2
0
0
20,885.1
30.5
2,302.0
2,271.0
0
24,345.7
30.5
2,302.0
2,271.0
747.8
58.8
60.0
24.3
-20.6
0.8
-1.4
-0.4
-0.4
745.0
92.8
60.0
24.0
-19.6
0.4
-3.3
-1.6
-1.6
Presence in electronic media: Internet: www.dexia.de
Contacts:
Patrik Krämer (Head of Treasury)
Christoph Schulte-Kemper Janina Groschupp
Anett Krause
Telefax: +49 30 25598-340
Tel.: +49 30 25598-303 Tel.: +49 30 25598-304
Tel.: +49 30 25598-305
Tel.: +49 30 25598-306
[email protected]
[email protected]
[email protected]
[email protected]
Düsseldorfer Hypothekenbank AG
Berliner Allee 41
40212 Düsseldorf
Tel.: +49 211 86720-0
Fax: +49 211 86720-199
www.duesshyp.de
Shareholders:
Resba Beteiligungsgesellschaft mbH, Berlin (94.6%)
Einlagensicherungs- und
Treuhandgesellschaft mbH,
Cologne (5.4%)
As a commercial real estate financing specialist Düsseldorfer Hypothekenbank AG addresses professional
real estate clients in Germany and Europe. The Bank is a trusted partner for direct and syndicate business. The focus lies on large-scale senior investment lending in the real estate asset classes office, retail,
residential and logistics. Düsseldorfer Hypothekenbank boasts excellent market knowledge in all strategic
asset classes. The Pfandbrief acts as a core refinancing instrument. Investors are competently advised in
German and English on all capital market products and can rely on a meticulously administered cover pool
for issued Mortgage and Public-sector Pfandbriefe. www.duesshyp.de.
Rating: Fitch
Public Pandbriefe
Others
IDR: BBB-, VR: f
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
2014
€ million
2013
€ million
11,346
1,213
362
851
655
712
176
536
304
8,445
6,548
195
195
4,841
652
3,090
1,099
0
0
932
162
0
0
770
0
862
772
0
90
-35
26
-58
16
-42
-42
11,919
1,093
246
847
586
494
116
378
300
9,462
6,905
0
0
5,281
522
3,529
1,230
0
0
713
68
0
10
635
0
865
772
0
93
6
24
-34
-26
-60
-60
Presence in electronic media: Reuters: DUESSHYP01, 02, 03, 04
Contacts:
Andreas Wodara Head of Treasury
Herbert Weimer Deputy Head of Treasury
Tel.: +49 211 86720-200
Tel.: +49 211 86720-203
[email protected]
[email protected]
69
DVB Bank SE
Platz der Republik 6
60325 Frankfurt/Main
Phone: +49 69 9750-40
Fax: +49 69 9750-4444
www.dvbbank.com
Shareholders:
DZ BANK AG (95.47 %)
free float (4.53 %)
DVB Bank SE, headquartered in Frankfurt/Main, Germany, is the leading specialist in the international
transport finance business. The Bank offers integrated financing solutions and advisory services in respect
of Shipping Finance, Aviation Finance, Offshore Finance and Land Transport Finance. DVB is present at all
key international financial centres and transport hubs: at its Frankfurt/Main head office, as well as various
European locations (Amsterdam, Athens, Hamburg, London, Oslo and Zurich), plus offices in the Americas
(New York City and Curaçao) and in Asia (Singapore and Tokyo). DVB Bank SE is listed at the Frankfurt
Stock Exchange (ISIN: DE0008045501). Further information is available on www.dvbbank.com
70
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Ship Pfandbriefe
Public Pfandbriefe
Ship Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Consolidated net income
2014
€ million
2013
€ million
24,510.8
–
–
–
–
–
–
–
–
–
–
–
–
20,079.0
486.2
–
19,592.8
–
2,500.0
2,007.7
75.0
–
700.0
1,157.7
75.0
1,924.6
1,437.4
–
487.2
215.9
-187.7
166.4
62.4
104.0
84.9
23,363.4
–
–
–
–
–
–
–
–
–
–
–
–
19,382.0
694.0
–
18,688.0
–
2,000.0
2,976.0
75.0
–
1,200.0
1,622.0
79.0
1,762.6
1,398.9
–
363.7
243.0
-178.8
212.1
-87.9
124.2
110.6
Presence in electronic media: w
ww.dvbbank.com
dvbbankse' on Twitter, YouTube, DVB Bank SE on Präzi, SlideShare,
Bloomberg: DVB:GR, Reuters: DVBG.F
Contact:
Elisabeth Winter, Head of Group Corporate Communications Phone: +49 69 [email protected]
Hamburger Sparkasse AG
Adolphsplatz / Grosser Burstah
20457 Hamburg
Tel.: +49 40 3579-0 Fax: +49 40 3579-3418
www.haspa.de
Shareholder:
HASPA Finanzholding (100 %)
Hamburger Sparkasse AG, also known as Haspa, is the leading retail bank for private and corporate SME
clients from the Hamburg metropolitan area. Haspa is Germany's largest savings bank with a balance
sheet total of approximately € 42 billion. It offers a wide range of financial services to private and corporate clients in the greater Hamburg economic area which comprises of more than 3 million inhabitants. In
order to provide for an adequate refinancing of our mortgage business, Haspa permanently issues mortgage covered bonds on the capital market since April 2006. We mainly issue plain vanilla and structured
registered mortgage covered bonds to our well known institutional clients.
Moody‘s
AAA
Total assets
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Subordinated liabilities Own funds as shown in the balance sheet – total –
Profit-sharing capitall
Fund for general banking risks
Net interest income
Income for the year
2014
€ million
2013
€ million
41,947
21,207
8,134
13,073
344
9,811
3,895
0
5,915
0
0
1,480
679
0
749
52
0
3,163
2,461
0
0
702
677
671
219
44
175
80
40,521
21,000
8,595
12,405
514
10,959
3,377
0
7,582
0
0
2,086
400
0
1,615
71
0
2,663
2,161
0
0
502
687
653
199
58
141
75
Presence in electronic media: Reuters: HASPA02
Contacts:
Klaus-Dieter Böhme
Holger Nielsen
Volker Retzlaff
Hagen-Christian Kümmel
Mathias Loll
Tilman Pflugbeil
Head of Treasury
Tel.:+ 49 40 3579-9250
Co Head of Treasury
Tel.: +49 40 3579-3340
Head of Funding
Tel.: +49 40 3579-9258
Head of Securities
Tel.: +49 40 3579-3660
Bond Trader
Tel.: +49 40 3579-3183
Head of Financial Engineering Tel.: +49 40 3579-7595
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
71
Shareholders:
Hansestadt Hamburg (10.80 %)
Land Schleswig-Holstein (9.58 %)
HSH Finanzfonds AöR (65.00 %)
Sparkassenverband Schleswig-Holstein (5.31 %)
Nine trusts represented by
J.C. Flowers & Co.LLC (9.31 %)
HSH Nordbank AG
Gerhart-Hauptmann-Platz 50
20095 Hamburg
Tel.: +49 40 3333-0
Fax: +49 40 3333-34001
www.hsh-nordbank.de
As a Bank for entrepreneurs, HSH Nordbank focuses primarily in northern Germany , but also in the
metropolises Hannover, Berlin, Düsseldorf, Stuttgart and Munich on business with corporate clients, real
estate clients and clients in upmarket private banking as well as savings banks. Internationally, the focus is
on corporate clients in the areas of shipping as well as energy and infrastructure.
In May 2006, HSH Nordbank received a license from the Federal Financial Supervisory Authority (BaFin)
to issue all three types of Pfandbriefe pursuant to the new Pfandbrief Act (PfandBG) that came into force
on July 19, 2005. HSH Nordbank is thus taking advantage almost of the Pfandbrief market’s entire breadth,
i.e. it issues public Pfandbriefe, mortgage Pfandbriefe and ship Pfandbriefe.
Rating: Public Pfandbriefe
Moody‘s
Aa2
Aa3
72
Ship Pfandbriefe
Baa2
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Ship Pfandbriefe Unsecured bonds Jumbo issues outstanding
Refinancing funds raised (registered and bearer bonds)
Public Pfandbriefe
Ship Pfandbriefe
Unsecured bonds Own funds as shown in the balance sheet – total –
Net interest income
Income for the year
2014
€ million
2013
€ million
112,689
19,062
4,344
14,718
8,295
4,107
1,547
2,560
0
16,367
2,339
0
0
37,868
4,590
5,740
1,981
25,557
0
3,750
1,945
1,100
0
845
3,276
8,862
4,735
29
4,098
918
-624
-422
247
-175
-312
112,873
18,895
4,595
14,300
9,508
2,810
904
1,906
0
16,585
2,773
0
0
40,772
4,586
6,867
2,041
27,278
0
3,250
5,647
947
980
208
3,512
9,342
5,231
32
4,079
1,103
-660
417
-806
-389
-425
Presence in electronic media: Reuters, Bloomberg
Contacts:
Mark Bussmann, Head of Treasury
Lars Tillmeier, Capital Markets
Christian Heiber , Capital Markets
Ralf Löwe, Head of Investor Relations
Tel:. +49 40 3333-14600
Tel.: +49 40 3333-25633
Tel.: +49 40 3333-25626
Tel:. +49 40 3333-14601
[email protected]
[email protected]
[email protected]
[email protected]
ING-DiBa AG
Theodor-Heuss-Allee 2
Tel.: +49 69 27222-69090
www.ing-diba.de
Shareholder:
ING Bank N.V. (100 %)
ING-DiBa with its more than 8 million private customers is third largest retail bank in Germany. It offers
its customers a wide range of products and services. The core businesses in its retail banking are savings,
mortgages, brokerage, consumer loans and current accounts. The commercial banking segment comprises
the bank’s business with corporate customers, among them major international companies. ING-DiBa has
more than 3,500 employees at offices in Frankfurt (main office), Hanover, Nuremberg, and Vienna.
ING-DiBa was granted the licence to issue mortgage Pfandbriefe from the Federal Financial Supervisory
Authority (BaFin) in 2010. Starting the Pfandbrief business was the next milestone in the
development of ING-DiBa and reflects its position as a large mortgage financer in Germany. The cover
pool for the time being consists exclusively of German residential mortgage loans. Mortgage Pfandbriefe
are a further diversification of ING-DiBa‘s stable funding basis.
Rating: Moody’s
AAA
Selected key figures (IFRS)
Total assets
Residential loans
Residential loans
Public Pfandbriefe
Ship Pfandbriefe Jumbo issues outstanding (nominal)
Benchmark issues outstanding (nominal)
Refinancing funds raised (nominal)
Mortgage Pfandbriefe (nominal)
Public Pfandbriefe
Core capital (without net income)*
Net interest income
Profit after tax
2014
€ million
2013
€ million
136,667
63,458
63,458
0
5,752
5,752
0
0
1,285
0
0
0
1,000
1,285
1,285
0
0
0
0
7,021
6,422
0
0
1,632
-736
952
-64
888
599
127,338
62,203
62,203
0
6,705
6,705
0
0
1,235
0
0
0
1,000
1,235
1,235
0
0
0
0
6,228
5,754
0
0
1,408
-664
780
-89
691
474
Presence in electronic media: www.ing-diba.de
Contacts:
Wolf Müller
Head of Treasury
Dieter Schreiner
Head of Funding & Investor Relations Tel.: +49 69 27222-69159
Tel.: +49 69 27222-69151
[email protected]
Frank Parensen
Funding & Investor Relations
[email protected]
Tel.: +49 69 27222-69176
[email protected]
73
Kreissparkasse Köln
Neumarkt 18 –24
50667 Cologne
Tel.: +49 221 227-01
Fax: +49 221 227-3920
www.ksk-koeln.de
Owner:
Zweckverband für die
Kreissparkasse Köln
Kreissparkasse Köln – with a business volume of € 23,4 billion and a balance sheet total of € 23,1 billion –
is one of Germany’s largest savings banks. Kreissparkasse Köln has had the legal form of a special-purpose
savings bank association since 1923. Today the special-purpose savings bank association is formed by the
Rhein-Erft-Kreis, the Rhein-Sieg-Kreis, the Rheinisch-Bergische Kreis and the Oberbergische Kreis.
As a regional market-leader, Kreissparkasse Köln supplies the people, trade and industry as well as the
counties, the cities and municipalities with the whole scope of financial products and services in its aggregate territory. Kreissparkasse Köln’s broad customer base consists of retail clients, private wealth management, small and medium-sized businesses as well as the public sector. Financing of real estate and local
authority loans rank among the core business segments of the Kreissparkasse Köln.
Rating: Moody‘s
74
Public Pfandbriefe
Aaa
Aaa
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
2014
€ million
2013
€ million
23,105
10,550
8,329
2,221
0
1,248
985
263
0
2,788
0
138
0
2,621
1,810
434
377
0
0
152
11
0
46
0
95
1,665
1,438
18
209
462
422
174
52
122
54
23,721
10,127
8,066
2,061
0
1,317
1,049
268
0
2,957
0
373
0
3,078
2,155
434
489
0
0
869
756
58
55
0
0
1,596
1,393
17
186
470
409
191
85
106
55
Presence in electronic media: Reuters: KSKKOELN03; Internet: www.ksk-koeln.de
Contacts:
Andree Henkel, Director
Tel.: +49 221 / 227 2081
[email protected]
Matthias Bourgart, Head of Treasury
Tel.: +49 221 / 227 2913
[email protected]
Owners:
State of Baden-Württemberg (24.988 %)
Sparkassenverband Baden-Württemberg (40.534 %)
City of Stuttgart (18.932 %)
Landeskreditbank Baden-Württemberg –
Förderbank (2.006 %)
Landesbeteiligungen BW (13.539 %)
Landesbank Baden-Württemberg
Am Hauptbahnhof 2
70173 Stuttgart
Tel.: +49 711 127 - 0
Fax: +49 711 127 - 43544
www.LBBW.de
Landesbank Baden-Württemberg is a universal bank and international commercial bank with total assets
of approximately € 266,2 billion (31.12.2014). In about 200 branches and representative offices and at
selected overseas locations - including New York, London, Singapore and Seoul - at the end of 2014,
11.117 employees were working for the success of the LBBW Group. The international network is complemented by the five German centers in Beijing, Mexico City, Singapore, Moscow and Delhi-Gurgaon.
Together with its legally dependent institutions (Baden-Württembergische Bank, Sachsen Bank and Rheinland-Pfalz Bank) as well as its specialized subsidiaries, LBBW is active in a variety of business segments
of a modern bank.
Rating: Mortgage
Pfandbriefe
Non-guaranteed Public
Pfandbriefe
Non-guaranteed
short-term
liabilities
long-term
liabilities
Fitch
-
AAA
F1+
A+ Outlook negative
Moody‘s
Aaa
Aaa
P-1
A2*
as of 2015-04-27 *Longterm Deposit, Longterm Senior Unsecured- and Issuer Rating; Ratings under Review up
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Unsecured bonds Jumbo issues outstanding*
Benchmark issues outstanding**
Public Pfandbriefe
Core capital (without net income/-loss)
Typical silent partners' contribution
Net interest income
Income for the year ***
2014
€ million
2013
€ million
266,230
27,126
13,520
13,606
6,146
5,842
2,145
3,697
1,270
15,143
1,482
n. s.
58,828
6,820
15,229
36,779
2,875
2,350
345,739
1,051
642
344,046
n. s.
n. s.
19,003
12,774
261
4,510
1,458
1,878
-1,853
787
-104
683
434
274,6461)
27,021
13,420
13,601
6,299
7,017
2,695
4,322
1,827
18,491
2,061
n. s.
71,588
6,974
20,377
44,237
5,750
1,500
11,011
699
105
10,207
n. s.
n. s.
20,1631)
13,060
389
4,027
2,687
1,773
-1,774
1,042
-314
728
339
* Jumbo issues outstanding included in Public Pfandbriefe ** Benchmark issues outstanding included in Mortgage Pfandbriefe as well as in Public Pfandbriefe (USD positions converted to Euro)
***After tax 1) After taking into account adjustments pursuant to IAS 8 and IFRS 10 Presence in electronic media: Reuters: LBBW; Bloomberg: LBBW
Contacts:
Bond Trading
Treasury
Capital Markets
Jürgen Motzer
Jörg Huber
Günter Gleumes
Tel.: +49 711 127-75328
Tel.: +49 711 127-78741
Tel.: +49 711 127-75300
[email protected]
[email protected]
[email protected]
75
Landesbank Berlin AG, Alexanderplatz 2, 10178 Berlin
Tel.: +49 30 869 801, Fax: +49 30 869 830 74, www.lbb.de
Shareholder:
Landesbank Berlin Holding AG (100 %)
The Landesbank Berlin AG is an issuer of both mortgage debentures and municipal bond securities. The
core of the LBB AG is the Berliner Sparkasse which was established in 1818 by the municipality of Berlin.
Except for its nation-wide credit card business activities, the LBB AG exclusively employs the name “Berliner Sparkasse” for its customer business activities. As a branch of the LBB AG and as a public sector savings bank with the legal form of a public-law institution with partial legal capacity, the Berliner Sparkasse
is a customer-oriented, innovative institution for retail banking and regional corporate banking. It is the
full service bank of the german capital and has about a 40 percent share of the Berlin market.
In retail banking it offers a comprehensive range of banking products: from retirement plans and private
real estate financing to liquidity management. For regional corporate banking the Berliner Sparkasse, with
its knowledge of the specific requirements and structures of the economic region, is the traditional partner
and service provider for the companies in Berlin. Its special competence in international business, leasing and factoring, electronic business and government subsidies as well as its centers for start-ups and
succession and future markets complement the pallet of offerings for corporate business. The commercial
real estate division of Berliner Sparkasse accompanies residential housing companies, professional investors, investment fund companies, real estate corporations, project developers, real estate developers and
wealthy private customers with their financing needs for the purchase, construction or the refinancing of
residential, office, retail or logistic real estate.
Rating: 76
Mortgage
Pfandbriefe
Public
Pfandbriefe
Long-term
liabilities
Individualrating
Moody‘s
dbrs
Aaa
–
Aaa
–
P-1
R-1 (middle)
A1 - negative
A (hoch) - stable
D+
BBB (high)
Selected financial figures
Total assets
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Core capital (without net income/-loss)
Net interest income
Net income from financial assets
Cost of bank levy
Expenditure from profit transfer
Income for the year
2014
€ million
2013
€ million
57,421
6,272
5,992
70,315
5,432
7,038
2,123
1,048
10,724
–
4,500
2,536
1,102
15,900
–
4,500
168
0
0
0
0
2,980
2,161
0
819
828
799
191
148
43
27
1
47
0
418
182
412
10
0
3,634
2,815
0
819
885
864
244
88
156
-44
16
0
0
Presence in electronic media: www.lbb.de; Reuters: LBBA, LBB1, LBB2
Contacts:
Head Treasury & Trading
Funding
Collateral Management:
Christian Pache
Alexander Braun
Andrej Schiebler
Tel.: +49 30 245-610 77
Tel.: +49 30 245-619 50
Tel.: +49 30 245-650 56
[email protected]
[email protected]
[email protected]
Helaba
Landesbank Hessen-Thüringen
Neue Mainzer Strasse 52–58
Tel.: +49 69 9132-01
Fax: +49 69 291517
www.helaba.de
Owners:
Sparkassen- und Giroverband Hessen-Thüringen (68.85 %)
State of Hesse (8.1 %)
Free State of Thuringia (4.05 %)
Sparkassenverband Westfalen-Lippe (4.75 %)
Rheinischer Sparkassen- und Giroverband (4,75 %)
Treuhänder der regionalen Sparkassenstützungsfonds (4.75 %)
Treuhänder der Sicherungsreserve der Landesbanken (4.75 %)
Landesbank Hessen-Thüringen (Helaba) is an important German real estate bank active in both the domestic and international markets. Its core business lies in the field of commercial financings, especially office space, retail property, commercial areas and logistics
hubs. The Bank takes a distinctly customer-focused approach to business with a team of highly specialised staff serving customers in
the domestic market and internationally in all of the main European and US markets. From classic loans to structured financings, the
bank offers the entire product and service range for property transactions.
In public-sector lending Helaba offers its customers the entire range from tailor-made financing solutions and services to active debt
management. Helaba’s main focus here is on German counterparties with an excellent ranking. The bank also holds an excellent market position with regard to public private partnerships (PPP). In addition to its Wholesale Business Helaba serves as central bank for
40 % of Germany´s savings banks in Hesse, Thuringia, North Rhine-Westphalia and Brandenburg.
In both business segments, its Mortgage and Public Pfandbriefe play a key role for funding purposes. The AAA ratings testify to the
high quality of the cover assets. The bank’s issuing policy seeks to achieve a wide diversification of the investor basis. In addition to
its domestic issuing activity, Helaba therefore also banks on international, large-volume benchmark bonds as well as a comprehensive
selection of structured issues.
Rating: Mortgage
Public
Short-term
Long-term
Pfandbriefe
Pfandbriefe
liabilities
liabilities
Viability
AAA
–
–
Fitch
Moody‘s
Standard & Poor‘s
AAA
Aaa
–
F1+*
P-1
A-1*
A+*
A1
A*
a+*
–
–
*Joint group rating of Sparkassen-Finanzgruppe Hessen-Thüringen
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Own funds total
Equity
Subordinated Debt
Net interest income
Loan loss provisons
Net interest income after provisions for losses and loans
Net trading income
Net income from hedging activities/derivatives
Result from financial investments
General administrative expenses
Earnings before tax
Consolidated net income
Presence in electronic media Reuters: HELABA; Bloomberg: HELA
Contacts:
Asset/Liability Management
Dirk Mewesen
Head of Asset/Liability Management Tel.: +49 69 9132-4693
Volker Walz
Treasury
Tel.: +49 69 9132-2798
Martin Gipp
Funding
Tel.: +49 69 9132-1181
Michael Heil
Deckungsmanagement
Tel.: +49 69 9132-3594
2014
in Mio. €
2013
in Mio. €
179,489
31,745
5,929
25,817
16,873
9,587
1,865
7,723
4,645
50,419
2,694
2,242
127
92,371
5,867
21,365
65,139
11,450
1,000
15,200
1,870
4,411
4,389
4,001
529
9,965
7,350
5,410
1,293
-80
1,213
317
126
51
45
-1,215
607
397
178,276
30,050
5,348
24,702
14,846
8,688
654
8,034
4,161
53,331
2,482
2,779
50
90,057
5,493
18,821
65,743
6,450
3,000
10,113
800
2,477
3,812
2,237
787
9,433
7,241
5,073
1,216
-240
976
300
344
-12
-8
-1,254
483
335
[email protected]
[email protected]
[email protected]
[email protected]
77
Shareholders:
M.M.Warburg & CO
M.M.Warburg & CO (AG & Co.)
Hypothekenbank AG
KGaA (60 %),
Colonnaden 5
Landeskrankenhilfe V.V.a.G.,
20354 Hamburg
Lüneburg (40 %)
Tel.: +49 40 355334-0
www.warburghyp.de
Real estate finance is the core business field of M.M.Warburg & CO Hypothekenbank AG (Warburg Hyp), the
main focus being on residential, office and retail properties in German metropolitan centers. In cooperation
with other specialized companies of the Warburg Banking Group Warburg Hyp is, moreover, able to provide
complex financing structures and other products from the real estate value added chain. Strict risk management procedures are in place to ensure a high quality of the cover pools.
Warburg Hyp refinances itself by issuing Pfandbriefe in registered and bearer format. The volume of individual issues ranges from € 1 million to € 20 million, with maturities of up to 10 years. The bank offers both
fixed-rate and floating-rate Pfandbriefe. Bank bonds and money market transactions round off Warburg
Hyp’s portfolio of products for funding its lending operations.
78
2014
€ million
2013
€ million
1,663
1,476
350
1,126
76
300
32
268
37
123
0
0
0
1,312
1,083
34
195
0
0
270
240
0
5
25
0
138
86
28
24
14
7
8
0
7
7
1,720
1,419
307
1,112
48
283
102
181
15
148
0
0
0
1,243
1,016
38
189
0
0
288
196
0
14
78
0
138
86
28
24
13
7
7
3
6
6
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Other Refinancings
Public Pfandbriefe
Unsecured bonds
Promissory notes
Subordinated liabilities (§ 10 KWG)
Net interest income
Income for the year
Presence in electronic media: Reuters: MMWB 15
Contacts:
Klaus Rüpke
Tel.: +49 40 355334-60
[email protected]
Oliver Grellmann
Tel.: +49 40 355334-61
[email protected]
Münchener Hypothekenbank eG
Karl-Scharnagl-Ring 10
80539 Munich
Tel.: +49 89 5387-800
Fax: +49 89 5387-900
www.muenchenerhyp.de
Owners:
75,629cooperative members
(as at 2014-12-31)
Münchener Hypothekenbank works within the Cooperative Financial Network as a partner to the Volksbanken and Raiffeisenbanken, with the result that, indirectly, the Bank has access to one of the most
extensive branch networks in Germany. Its primary function consists in strengthening the cooperative
banks in a competitive environment via long-term fixed interest financing.
The bank is mone of Germany’s largest credit cooperatives specializing in long-term financing of private
and commercial real estate within Germany and abroad. In the mortgage business, the bank’s main focus
is on residential property financing. MünchenerHyp offers all maturity structures for Pfandbriefe.
Rating: Fitch
Moody’s
Mortgage
Pfandbriefe
Public
Pfandbriefe
Short-term
liabilities
Senior unsecured
liabilities
–
Aaa
–
Aaa
–
Prime-1
AA-*
A2
*Rating Genossenschaftliche FinanzGruppe
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
Presence in electronic media:
Contacts:
2013
€ million
36,340
23,556
19,578
3,978
1,741
4,436
3,678
758
206
5,812
1,070
16
15
30,766
17,571
5,636
7,559
3,875
3,500
3,393
2,576
94
288
435
0
1,389
1,227
6
156
171
82
27
0
27
16
34,899
21,522
17,477
4,045
1,923
3,618
2,879
739
322
6,952
1,016
397
315
30,690
16,430
6,406
7,854
3,750
3,500
7,547
4,385
893
1,265
1,004
0
1,036
874
6
156
144
74
22
-1
21
7
Reuters: MHB01; Bloomberg: MHYP
GIS: Pages 600, 610, 611, 613-620, 630-636, 640-647
Rafael Scholz, Head of Treasury
Richard-Peter Leib, Head of CapitalMarkets Claudia Bärdges-Koch, Co Head of Treasury
2014
€ million
Tel.: +49 89 5387-106
Tel.: +49 89 5387-127
Tel.: +49 89 5387-110
[email protected]
[email protected]
[email protected]
79
NATIONAL-BANK AG
Theaterplatz 8
45127 Essen
Phone: 0201 8115 0
Fax: 0201 8115 500
www.national-bank.de
Shareholders:
approx. 5.200,
of that 54% private
and 46% institutional investors
NATIONAL-BANK is one of the leading group-independent private regional banks in Germany. With
approximately 700 employees, we serve sophisticated and discerning private and corporate customers,
as well as medium-sized institutional investors at 22 locations in North Rhine Westphalia. Reliable service
and competent consulting services characterize our conservative business identity. Our business model
stands for solidity and stability. Around 5,200 private shareholders represent our independence, a commitment that we feel strongly about and are continually renewing. We identify with and maintain a strong
commitment to culture and society. Our focus is the advancement of art, music, education and society.
In 2014, NATIONAL BANK was granted the authorization to conduct mortgage Pfandbriefe. NATIONAL
BANK is not publicly rated.
80
Total assets
Customer Loan Volume
Customer Deposits
Net Interest Income
Commission Net Income
Other Income and Expenses
General Administrative Expenses
Risk Provisions
Operating Result
Return on Equity Before Taxes in %
Cost income Ratio in %
Core capital ratio in %
Total capital ratio in %
2014
€ million
2013
€ million
4,090
3,270
3,166
3,968
3,104
3,182
97.4
42.0
2.5
95.7
14.0
32.3
97.6
40.7
2.2
96.6
16.5
27.4
9.9
67.4
11.2
12.4
10.5
68.7
11.2
12.6
Contacts:
Private & Institutional Customers
Georg Schachner Phone: +49 201 8115 554
[email protected]
Investor Relations
Dr. Gregor Stricker [email protected]
Phone: +49 201 8115 519 NATIXIS Pfandbriefbank AG
Im Trutz Frankfurt 55
60322 Frankfurt
Tel.: +49 69 971530
www.pfb.natixis.com
Shareholder :
Natixis S. A. (100%)
Natixis is among the market leaders in commercial real estate financing in Europe. In this business area
Natixis has been a player in the five most important European markets in Germany, France, Italy, Spain
and Great Britain. As ‚ is part of Groupe BPCE, it belongs to the second largest banking group in France.
With NATIXIS Pfandbriefbank AG, Natixis continues to consistently move forward with a targeted and
sustainable expansion in real estate financing in Germany. NATIXIS Pfandbriefbank AG is specialized in
financing office, retail, logistic and residential properties of commercial clients as well as hotels and mixed
used objects.
NATIXIS Pfandbriefbank AG owns the license to issue mortgage Pfandbriefe. ln early 2013, NATIXIS
Pfandbriefbank AG started its banking business and has been since then active in the new issue market.
The Pfandbriefe carry an Aaa Rating from Moody's.
Rating: Moody‘s
Aaa
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income from transfer of losses
Profit transfer under the partial profit transfer agreement
Income for the year
2014
€ million
2013
€ million
1.393
536
–
–
–
790
0
–
541
541
–
–
0
0
–
–
–
–
–
–
599
0
–
–
–
536
–
536
181
0
–
0
–
242
242
–
–
0
0
–
–
–
–
–
–
55
–
–
15
10
1
0
1
0
-1
0
55
–
–
6
10
-1.9
0
-1.9
1.9
0
0
790
458
0
Contacts:
Henning Rasche, Member of the Board
Thomas Behme, Treasury
Thorsten Eggers, Treasury
Tel: +49 69 97153 496
Tel: +49 69 97153 130
Tel: +49 69 97153 142
[email protected]
[email protected]
[email protected]
81
Nord/LB Norddeutsche
Landesbank Girozentrale
Friedrichswall 10
30159 Hanover
Tel.: +49 511 361-0
Fax: +49 511 361-2502
www.nordlb.de
Owners:
State of Lower Saxony (59.13 %)
State of Saxony Anhalt (5.57 %)
Sparkassenverband Niedersachsen (26.36 %)
Sparkassenbeteiligungsverband
Sachsen-Anhalt (5.28 %)
Sparkassenbeteiligungszweckverband
Mecklenburg-Vorpommern (3.66 %)
NORD/LB is a universal bank in the heart of North Germany, clearly concentrated on its core business
and focused particularly on the region in which it is based. With total assets worth € 197.6 bn and roughly
6,600 employees, NORD/LB is one of the ten biggest banks in Germany. In the federal states of Lower
Saxony and Saxony-Anhalt, the bank serves as a Landesbank. In these two federal states as well as in
Mecklenburg-Western Pomerania, NORD/LB is also a partner to all savings banks in the role as the central
savings bank. NORD/LB is one of the leading banks in Germany according to national and international
bond issues.
Rating: Fitch
Moody‘s
82
–
aaa
Public Pfandbriefe
AAA
aaa
Total assets AöR
Public Pfandbriefe
Ship Pfandbrief
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
–
a1
2014
€ million
2013
€ million
131,022
5,500
1058
15,356
899
1128
67
35,162
3,018
17,826
14,318
2,450
3,080
4,419
500
0
0
1,346
1,953
227
393
9,557
6,644
95
2,818
1,421
852
659
-401
258
138
131,620
5,251
909
17,156
1,087
947
91
44,041
2,154
19,659
21,886
2,450
2,602
5,788
0
0
1,000
1,390
2,697
440
261
9,372
6,589
115
2,668
1,298
739
730
-472
258
155
Presence in electronic media: Reuters: NORDLB, Bloomberg: NOLB
Contacts:
Martin Hartmann, Head of Markets Tel.: +49 511 361-2052
[email protected]
Dirk Bollmann, Head of Treasury
Tel.: +49 511 9818-9624
[email protected]
PSD Bank Nürnberg eG
Willy-Brandt-Platz 8 D-90402 Nuremberg
Phone: +49 911 2385-0
Fax: +49 911 2385-109
www.psd-nuernberg.de
Owner:
52,006 Members (Status 31 Dec. 2014)
The PSD Bank Nürnberg is an independent cooperative bank with nearly 80 years of experience. As an advising direct bank in the German states of Franconia and Saxony the PSD Bank Nürnberg acts exclusively
for private clients. The bank defines itself as an omnichannel financial institution and is also available for
its members and clients on a personal basis at selected sites. The mission to promote development among
its members and the economic support of its clients form the main focus of its entrepreneurial actions. In
this connection the cooperative bank concentrates on its core competences in the construction mortgage
sector and standard products in the private client sector.
The PSD Bank Nürnberg eG has applied for a licence to trade with mortgage bonds and intends to regularly issue mortgage bonds in the future.
Rating: Fitch
Long-term issuer default rating
AA- Short-term issuer default rating
F1 +
As at March 24, 2015
Selected financial data*
Total assets
Own funds as shown in the balance sheet – total Core capital (excl. distributable profit)
Profit sharing capital
Net interest income
Fee and commission income
Other operating profit/loss
Operating result before risk provisions
Annual net profit
2014
€ million
2013
€ million
2,795.1 1,557.6 2,705.8 1,371.5 196.6 8.0 – 47.3 -1.1 -1.0 -23.5 21.7 6.3 190.9 8.0 – 49.0 -1.1 0.5 -22.8 25.6 6.0 *All data are based on the annual financial statement
Presence in electronic media: www.psd-nuernberg.de
Contacts:
Johann Büchler, Chairman of the Board
Phone +49 911 2385-100
[email protected]
Horst Koller, Treasury Phone +49 911 2385-125
[email protected]
83
SaarLB
Landesbank Saar
Ursulinenstrasse 2
66111 Saarbrücken
Tel.: +49 681 383-01
Fax: +49 681 383-1200 www.saarlb.de
Owners:
Saarland (74.90 %)
Sparkassenverband Saar (25.10 %)
The SaarLB …
... is the Franco-German regional bank.
For both countries, we offer cross-border knowledge of markets, business practices and legal norms. Our
roots lie in Saarland (and its surrounding areas in Germany) as well as in neighbouring France, particularly in Alsace-Lorraine. We see outstanding future opportunities in this region thanks to with its excellent
European composition.
... concentrates on small and medium-sized enterprises (SMEs).
We serve corporate customers, real estate investors and project financing (particularly for renewable energies), high net worth individuals and institutionals. We cultivate partnerships on equal terms and offer our
customers focussed financial services.
... views itself as the motor for the economy in the region.
And We want to actively shape its long-term progress. We are partners for the state and also work together
with the savings banks for municipalities in the region.
Rating: 84
Mortgage
Pfandbriefe
Fitch
Moody‘s
–
–
Public
Pfandbriefe
–
–
Non-guaranteed short-term liabilities
F1
P-2
Non-guaranteed long-term liabilities
Financial
strength
Viability
Rating
A
A3
bb+
ba2
bb+
ba2
Total assets
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
2014
€ million
2013
€ million
15,901
2,614
772
1,842
1,310
6,439
808
4,261
429
1,259
4,261
0
0
0
75
180
560
175
0
851
700
9
142
113
71
48
21
27
4
16,716
2,432
757
1,675
1,307
6,860
785
5,843
400
1,375
4,068
0
0
789
10
88
573
118
0
873
710
39
124
112
71
54
15
40
0
Presence in electronic media: Reuters (pages LASAA, LASAB)
Contacts:
Treasury
Funding
Investor Relations
Joachim Schäfer
Hans-Peter Arweiler
Dieter Gläsener
Tel.: +49 681 383-1521
Tel.: +49 681 383-1685
Tel.: +49 681 383-1362
[email protected]
[email protected]
[email protected]
Santander Consumer Bank AG
Santander-Platz 1
41061 Mönchengladbach
Tel.: +49 1805 556499 Fax: +49 1805 556498 www.santander.de
Shareholder:
Banco Santander S.A.,
Madrid (100 %),
indirect
Santander Consumer Bank AG is a well established provider for financial services in the private customer
business. The bank is the largest non captive bank for cars, motorbikes and (motor-) caravans in Germany.
Moreover the bank is also a market leader for consumer good financing. The broad range of financial
products is distributed by more than 300 branches or via TeleCenter and Internet. Santander Consumer
Bank AG is a fully-owned subsidiary of Banco Santander S.A., Madrid, and serves its customers in Germany using the brands Santander Consumer Bank, Santander Bank as well as Santander Direkt Bank.
Santander Consumer Bank AG has applied for the license to conduct the German mortgage Pfandbrief
business and plans to frequently issue Pfandbriefe.
Rating Banco Santander S. A.*: Moody‘s
Standard & Poor‘s Fitch Ratings
Outlook Short-term liabilities
Financial strength
A3
BBB+
A-
positive
stable
stable
P-2
A-2
F2
baa1 (BCA)
a- (SACP)
–
*Santander Consumer Bank AG does not currently have a published rating.
Ratings of Banco Santander S. A. as of June 3rd, 2015
Selected key figures*
Total assets
Net interest income
Fee and commission income
Other operating result
Net Provisions for risks
2014
€ million
2013
€ million
38,637
3,725
36,895
3,615
3,068
219
42
1,175
288
-365
-883
216
-106
110
3,068
219
98
1,073
276
23
-810
563
-96
466
* all values based on the individual account
Presence in electronic media: www.santander.de / www.santanderbank.de / www.santander.com /
www.santanderconsumer.com; Bloomberg: 1496Z GR; Reuters: CCKGG.UL
Contacts:
Board Member
Head of Capital Markets
Head of Debt Issuance
Investor Relations Dr. Arnd Verleger
Peter René Müller
Tatsiana Krause
Holger Grawe
Tel.: + 49 2161 690 - 9885
Tel.: + 49 2161 690 - 7337
Tel.: + 49 2161 690 - 5016
Tel.: + 49 2161 690 - 7313
[email protected]
[email protected]
[email protected]
[email protected]
85
SEB AG
Stephanstrasse 14-16
Tel.: +49 69 258-0
Fax: +49 69 258-6464
www.seb.de
Shareholder:
SEB AB, Stockholm (100 %)
In 2000, SEB AG became the German subsidiary of one of Northern Europe’s most significant financial
services groups which is based in Sweden. The core business lies in the field of banking and financial services for companies, institutions and real estate clients. Across Europe, SEB Group has more than 4 million
customers and runs the banking business with about 16.000 employees.
In 2005 SEB AG seized the business opportunities that had opened up under the new Pfandbrief Act. It
was the first German commercial bank to be granted a Pfandbrief license from BaFin (Federal Financial
Supervisory Authority).
Rating: Public
Pfandbriefe
Mortgage
Pfandbriefe
Moody‘s
Aaa
Aaa
86
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
Presence in electronic media: Reuters, Bloomberg
Contact:
Karl Borgmeyer
Tel.: + 49 69 258-6772
[email protected]
2014
€ million
2013
€ million
28.686
4.627
1.259
3.368
1.707
638
273
365
6
2.127
279
1.565
23
31,754
5,309
1,523
3,786
1,833
312
171
141
1
2,077
258
1,732
139
2.653
1.978
20
0
0
2,835
2,161
20
0
0
0
0
0
392
0
200
0
11
383
0
1.965
0
8
101
202
110
-13
124
124
2,020
0
8
123
210
51
14
36
20
Sparkasse KölnBonn
Hahnenstrasse 57 50667 Cologne
Tel.: +49 221 226-1 Fax: +49 221 2401473
www.sparkasse-koelnbonn.de Owner:
Zweckverband Sparkasse KölnBonn
Sparkasse KölnBonn dates back to a merger on 1 January 2005 between Stadtsparkasse Köln and
Sparkasse Bonn. With total assets of € 27.39 billion(1) it is Germany’s largest public-sector savings bank.
For capital market funding purposes, Sparkasse KölnBonn utilizes the entire range of refinancing instruments. Since 1995, the Bank has its own counterparty credit rating from Moody’s and since 1998, it has its
own Debt Issuance Programme. The type, terms and size of its issues are geared to the specific requirements of institutional investors.
In 2002 Stadtsparkasse Köln issued the first Public Pfandbrief out of a savings bank. This was followed
by the first Mortgage Pfandbrief in 2004.
(1)
All data provided as at 31 December 2014 (uncertified)
Rating: Moody’s
Fitch
DBRS
Mortgage
Pfandbriefe
Aaa
-
-
Public
Pfandbriefe
Aaa
-
-
Short-term
liabilities
P-1 (neg. Outlook)
F1+
R1 (middle)
Total assets
Residential loans
Commercial loans
Public Pfandbriefe
Unsecured bonds
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Administrative expense
Income for the year
Long-term
liabilities
A1(neg. Outlook)
A+
A (high)
2014
€ million
2013
€ million
27,395
9,413
1,550
1,315
235
2,195
367
2,481
2,675
75
1,473
0
1,000
331
750
0
34
0
n. s.
2,194
1,497
224
473
453
440
203
42
161
67
28,713
9,454
1,570
1,311
259
2,124
138
1,932
171
1,634
0
500
1,123
6
38
50
n. s.
2,261
1,467
230
564
452
418
231
60
171
93
Presence in electronic media: Reuters: SPKOB; Bloomberg: SPKKB Contact:
Ralph Rutemöller Funding und Investor Relations
Tel.: +49 221 226-96276
[email protected]
87
UniCredit Bank AG
(formerly Bayerische Hypound Vereinsbank AG)
Kardinal-Faulhaber-Strasse 1
80333 Munich
Tel.: +49 89 378-0 e-mail: [email protected]
www.hypovereinsbank.de
Shareholder:
UniCredit S.p.A., Rom (100 %)
UniCredit Bank AG - HypoVereinsbank - is one of the leading financial institutions in Europe. The bank
ist part of the UniCredit Group, which operates in 17 countries with more than 147,000 employees and
over 8,500 branches. HypoVereinsbank is one of the largest private banks in Germany with around 18,000
employees and 796 branches.
The core competencies are retail banking, corporate banking for small, medium sizes and large, internationally active corporate customers, private banking and international capital markets.
The bank offers its clients the entire product range covering all aspects of real estate financing, including all
innovative products and services in addition to classic real estate financing.
Rating: Mortgage
Public
as of 2013-05-05
Pfandbriefe
Pfandbriefe
Fitch
AAA
AAA
Moody‘s
Aa1*
Aa1*
-
AAA
S&Ps
*Under review for upgrade **CreditWatch negative
Short-term
liabilities
F1+
P-2*
A-2**
88
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
of which cross-border*
Public-sector loan commitments*
Total funds outstanding (registered and bearer bonds)*
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
*Mortgage business only
Presence in electronic media: Reuters: HVMG; Bloomberg: HVM GR
Long-term
liabilities
A+
Baa1*
A- **
2014
€ million
2013
€ million
231,967
38,536
24,395
14,141
10
6,035
2,964
3,071
0
9,939
868
206
8
31,870
16,667
5,134
10,069
4,229
3,032
2,129
1,187
134
472
374
0
18,928
18,353
0
575
2,879
-3,299
1,076
-268
808
627
236,457
39,330
25,374
13,956
41
5,133
3,148
1,985
0
11,061
1,095
391
2
36,755
18,771
5,754
12,230
6,018
3,033
3,772
1,626
379
1,305
462
0
19,913
18,353
0
1,560
2,873
-3,807
943
129
1,072
756
Contacts:
Bond Trading:
Treasury:
Capital Markets:
Kai Seeger Ralf Wasmundt Eduard Cia
Holger Oberfrank Thomas Neupert
Rüdiger Jungkunz
Martin Schulze Elfringhoff
Jürgen Neumuth
Tel.: +49 89 378-12306 Tel.: +49 89 378-16165 Tel.: +49 89 378-14172
Tel.: +49 89 378-14337 Tel.: +49 89 378-14099
Tel.: +49 89 378-15885 Tel.: +49 89 378-14077
Tel.: +49 89 378-14255
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected] Legal Owner:
VALOVIS BANK AG
Resba Beteiligungsgesellschaft mbH (94%)
Theodor-Althoff-Strasse 7
Einlagensicherungs- und Treuhandgesell45133 Essen
schaft mbH (6%)
Tel.: +49 201 2465-9800
Fax: +49 201 2465-9899
www.valovis.com
Valovis Bank is a financial services provider focused on the business lines real estate finance and
consumer factoring. The bank is located in Germany with offices in Essen and Neu-Isenburg. The bank
has about 110 employees and is a member of the German deposit protection fund.
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Unsecured bonds
Promissory notes
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
2014
€ million
2013
€ million
1,249
579
0
579
0
0
0
0
0
0
0
0
0
893
242
0
0
601
50
0
0
15
0
0
0
15
0
87
98
0
0
46
54
-9
-17
-26
-26
2,224
742
19
723
0
20
0
20
0
0
0
0
0
1,392
497
0
0
845
50
0
0
169
0
0
0
169
0
113
143
0
0
38
64
-42
12
-30
-30
89
WL BANK AG Westfälische
Landschaft Bodenkreditbank
Sentmaringer Weg 1
48151 Münster
Phone: +49 251 4905-0
Fax: +49 251 4905-5555
www.wlbank.de
Shareholders:
Wegeno Verwaltungsgesellschaft mbH
(100 % WGZ BANK): 90.917 %
Stiftung Westfälische Landschaft: 4.618 %
Volksbanken and Raiffeisenbanken: 4.465 %
WL BANK was founded in Münster (Westphalia) in 1877. The Bank maintains representative offices in
Berlin, Düsseldorf, Hamburg and Munich as well as sales locations in Frankfurt, Heidelberg and
Schwäbisch Gmünd. As a Pfandbriefbank, in addition to public-sector lending, WL BANK’s prime focus
is on long-term real estate loans. Besides commercial property finance, its core business also consists in
financing property for residential use. As a member of the German Volksbanken Raiffeisenbanken cooperative financial network, the Bank is a partner for the commercial and agricultural credit cooperatives.
Furthermore, within the WGZ BANK group, it serves as a center of competence for public-sector clients.
High quality funding provides the basis for a pricing policy that is both low-cost and market to market. The
Bank’s activities are primarily funded by issuing Pfandbriefe. Besides small-scale bearer and registered
bonds, also in structured form, the Bank issues Pfandbriefe in the benchmark format.
Rating: Mortgage
Pfandbriefe
Public
Pfandbriefe
Long-term
liabilities
Outlook
Fitch
S&Ps
–
AAA
–
AAA
F1+
A-1+
AA-
AA-
stable
stable
90
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Public Pfandbriefe
Unsecured bonds
Promissory notes
Net interest income
Income for the year
2014
€ million
2013
€ million
38,239
16,003
13,372
2,631
0
2,776
2,220
556
0
19,936
4,395
2,092
82
30,579
11,379
13,063
6,137
2,000
3,250
5,701
1,667
1,789
1,586
659
0
519
355
2
162
123
51
43
-30
13
0
39,160
14,966
12,457
2,509
12
2,389
1,844
545
0
22,371
4,848
1,492
314
31,290
10,626
14,922
5,742
4,500
1,500
3,891
1,583
601
1,363
344
0
529
355
2
172
109
46
36
-17
19
0
Presence in electronic media: Reuters: WLBANK; www.wlbank.de
Contacts:
Sascha Aldag, Director
Robert Holl, Deputy Department Director
Phone: +49 251 4905-2200
Phone: +49 251 4905-2240
[email protected]
[email protected]
Wüstenrot Bank AG
Pfandbriefbank
Hohenzollernstrasse 46
71630 Ludwigsburg
Tel.: +49 7141 16-1
Fax: +49 7141 16-4984
www.wuestenrot.de
Shareholder:
Wüstenrot & Württembergische AG (100 %)
As a universal bank licensed to issue Pfandbriefe (covered bonds under German law), Ludwigsburg-based
Wüstenrot Bank AG Pfandbriefbank (“WBP”) forms part of the Home Loan Savings Bank division of Wüstenrot & Württembergische Group (“W&W”), alongside Wüstenrot Bausparkasse AG, W&W Group’s savings and
home financing institution. W&W Group are the experts covering the four key elements of modern financial
planning: personal insurance, home loan savings and housing, risk protection, as well as savings and investment. WBP was created from the merger of Wüstenrot Bank AG and Wüstenrot Hypothekenbank AG. The
two banks joined forces to capitalise on the reformed legal framework created by the new German Pfandbrief Act (Pfandbriefgesetz), which came into force on 19 July 2005. Within the W&W Group, WBP provides
home loan financing to private customers outside the home loan savings business. Its funding strategy is
focused on the capital markets: most of WBP’s business is refinanced through Pfandbrief issues, but also
via customer deposits. In addition, WBP’s award-winning current account is used by other Group entities to
attract and retain customers.
Public Pfandbriefe
Senior Unsecured
Outlook
S&P
AAA
–
A- stable
Total assets
Residential loans
Commercial loans
Residential loans
Commercial loans
Public Pfandbriefe
Other bonds Jumbo issues outstanding
Public Pfandbriefe
Other bonds
Promissory notes
Net interest income
Provisions for risks1)
Income for the year2)
1)
2)
2014
€ million
2013
€ million
13,356
7,723
7,706
17
1
155
155
0
0
1,540
1,137
704
679
4,516
3,478
5
1,033
0
0
383
121
0
123
109
30
525
350
29
146
106
93
25
7
32
13
13,444
8,447
8,426
21
2
471
470
1
0
1,498
850
1,082
584
5,077
3,748
5
1,324
0
0
386
285
0
0
101
0
555
350
64
141
87
96
9
6
15
1
Including net income from investments
Before consideration of payments under profit transfer agreement with W&W AG
Presence in electronic media: Bloomberg: WBPF
Contacts:
Thomas Arendt, Head of Treasury
Tel.: +49 7141-16-754638
Frank Boetzer, Head of Funding & Liquidity Tel.: +49 7141-16-755665
Frank Retzmann, Funding
Tel.: +49 7141-16-752848
[email protected]
[email protected]
[email protected]
91
Other Pfandbrief Issuers 2014
As at Dec. 31, 2014 (in € billion)*
Calenberger Kreditverein
Förde Sparkasse
Kreissparkasse Göppingen
Kreissparkasse Herzogtum Lauenburg
Kreissparkasse Ludwigsburg
Nordostseesparkasse
Nassauische Sparkasse
NRW.Bank
Ritterschaftliches Kreditinstitut
Sparkasse Aachen
Sparkasse Bremen
Sparkasse Essen
Sparkasse Hanau
Sparkasse Hannover
Sparkasse Holstein
Sparkasse Krefeld
Sparkasse Leverkusen
Sparkasse zu Lübeck
Sparkasse Münsterland-Ost
Sparkasse Neuss
Sparkasse Pforzheim-Calw
Sparkasse Westmünsterland
Stadtsparkasse Düsseldorf
Stadtsparkasse Mönchengladbach
Stadtsparkasse München
Stadtsparkasse Wuppertal
Taunussparkasse
Others**
Total
92
Total Pfandbriefe
Gross sales Outstanding
37
31
100
40
60
60
135
0
25
0
0
170
15
261
100
35
60
15
45
20
103
25
0
0
120
20
10
n. s.
1,487
207
420
170
205
175
170
335
2,239
227
200
215
577
280
862
432
285
215
170
445
220
393
235
832
151
220
237
301
555
10,973
37
31
90
40
60
60
100
0
25
0
0
170
5
11
30
35
60
15
45
20
103
25
0
0
120
20
10
n. s.
1,112
206
420
150
205
175
170
300
0
220
0
215
577
52
66
312
285
215
170
445
200
393
235
632
0
120
237
301
509
6,810
0
0
10
0
0
0
35
0
0
0
0
0
10
250
70
0
0
0
0
0
0
0
0
0
0
0
0
n. s.
375
1
0
20
0
0
0
35
2,239
7
200
0
0
228
796
120
0
0
0
0
20
0
0
200
151
100
0
0
46
4,163
*)Outstandings ≥100 mn €
**)Outstandings ≤100 mn €: Degussa Bank, Landessparkasse Oldenburg, Kreissparkasse Böblingen, Kreissparkasse Heilbronn, Landessparkasse Oldenburg,
Sparkasse Elmshorn, Sparkasse Fürstfeldenbruck, Sparkasse Harburg-Buxtehude, Sparkasse Kulmbach-Kronach, Sparkasse Mittelthüringen,
Sparkasse Nürnberg, Sparkasse Paderborn-Detmold, Sparkasse Südholstein, Verbands-Sparkasse Wesel, Weser Elbe Sparkasse Source: vdp
Public Pfandbriefe
Topics covered in 1996 – 2014
1996
— The Pfandbrief market, legal framework and issuers | FRANZ-JOSEF ARNDT
— The international credit investor’s view of Pfandbriefe | GEORG GRODZKI
— The Jumbo Pfandbrief market | FRIEDRICH MUNSBERG
— Liquidity on the Pfandbrief market | KARL-HEINZ PRIESTER
— Yields and spreads on the German market | DR. ALFRED BÜHLER, DR. MICHAEL HIES
— The German Pfandbrief Price Index PEX and the Pfandbrief
Performance Index PEXP | DR. ALFRED BÜHLER, DR. MICHAEL HIES
— Mortgage Pfandbriefe and mortgage-backed securities | FRIEDRICH MUNSBERG
1997
— The Pfandbrief market, legal framework and issuers | FRANZ-JOSEF ARNDT
— Rating German Pfandbriefe: Overcollateralization for a Triple A
| GAIL I. HESSOL, DR. JÜRGEN U. HAFERKORN, MICHAEL ZLOTNIK
— Indices for the Jumbo Pfandbrief market: JEX and JEXP
| JOSEF DEUTSCH, JÜRGEN HILLER
— Yields and spreads on the German market | DR. ALFRED BÜHLER, DR. MICHAEL HIES
— The German Pfandbrief Price Index PEX and the Performance Index PEXP
| DR. ALFRED BÜHLER, DR. MICHAEL HIES
— Mortgage Pfandbriefe and mortgage-backed securities | FRIEDRICH MUNSBERG
— A European standard for the Pfandbrief | DR. DIETER BELLINGER
1998
— The German Pfandbrief | FRANZ-JOSEF ARNDT
— The Jumbo Pfandbrief future | JOSEF DEUTSCH, RALF DREYER
— The Pfandbrief under European Monetary Union | GERHARD BRUCKERMANN
— A European standard for the Pfandbrief | DR. DIETER BELLINGER
— Pfandbrief rating in EMU | DR. Oliver EVERLING
— Yields and spreads on the German capital market
| DR. ALFRED BÜHLER, DR. MICHAEL HIES
— Indices for the German Pfandbrief market: PEX/PEXP and JEX/JEXP
| DR. ALFRED BÜHLER, JOSEF DEUTSCH, JÜRGEN HILLER, DR. MICHAEL HIES
1999
— The Pfandbrief | FRANZ-JOSEF ARNDT
— The mortgage banks in Europe | KURT BONFIG
— State supervision of the German mortgage banks | VOLKHER KERL
— Relative value aspects in the Jumbo market | DR. ERWIN MIRKES
— Pfandbrief’s prospects as a spread product benchmark under the euro
| DR. RALF GROSSMANN, HANSJÖRG PATZSCHKE
— Structured Pfandbriefe as an attractive alternative investment | MARTIN SCHULTE
— The Pfandbrief and European bond market indices | ANNETTE SCHNEEWEIS
93
2000
— The Pfandbrief | FRANZ-JOSEF ARNDT, JENS TOLCKMITT
— Alternative funding possibilities for mortgage banks | FRANK DAMEROW
— The Pfandbrief and related debt instruments | GEORG GRODZKI
— The world of bonds goes electronic | HORST BERTRAM
— The Jumbo repo market | MARCO HOSENSEIDL, TED PACKMOHR
— Jumbo Pfandbrief – relative value analysis | DR. UDO HERGES
— State supervision of the German mortgage banks | VOLKHER KERL
— Valuing properties for property finance purposes | REINER LUX
94
2001
— The Pfandbrief – latest developments and legal framework
| FRANZ-JOSEF ARNDT, JENS TOLCKMITT
— The Pfandbrief and related debt instruments | GEORG GRODZKI
— Continued internationalization of Pfandbriefe and growth of Mortgage-Backed Securities
| TED LORD, DAVID WELLs
— The rating approaches for German Pfandbriefe | CHRISTOPH ANHAMM
— Electronic trading still does not satisfy all expectations | HORST BERTRAM
— A fair value model for the Pfandbrief spread | ANDREAS REES
2002
— The Pfandbrief in the European capital market | JENS TOLCKMITT, CHRISTIAN WALBURG
— The amendment of the Mortgage Bank Act: Safety of the Pfandbrief further strengthened
| DR. LOUIS HAGEN
— Business potential of Germany’s mortgage banks for public-sector lending in non-European G7
countries and Central European OECD states | NORBERT MEISNER
— The rating approaches for Pfandbriefe | CHRISTOPH ANHAMM, HEIKO LANGER
— Jumbo Pfandbrief spreads: everything new, everything different
or everything as it was? | THOMAS HERBERT, JÖRG BIRKMEYER
— Securitization in the context of mortgage banking
| IAIN BARBOUR, FRANK DAMEROW, JENNIFER THYM
— New developments in the repo market – Implications for the Jumbo repo market
| EDUARD CIA, CLAUDIA SCHINDLER
—
—
—
—
—
—
2003
The Pfandbrief in the European Capital Market | SASCHA KULLIG, CHRISTIAN WALBURG
Covered Bond – The unknown Species | DR. LOUIS HAGEN
Pfandbriefe and Other Non-sovereign High-quality Credits
| RALF GROSSMANN, ALEXANDRE TRULLI
Methodology by Fitch Ratings for Pfandbriefe Takes Into Account Optimized Mortgage Bank Act
| BRIDGET GANDY, SILKE REINIG, JENS SCHMIDT-BÜRGEL
Moody’s Rating Methodology for German Pfandbriefe | JOHANNES WASSENBERG
Standard & Poor’s Analytical Approach to Rating Pfandbriefe in Germany
| DANIEL KÖLSCH, MICHAEL ZLOTNIK, ALAIN CARRON
2004
— The Pfandbrief in the European Capital Market | SASCHA KULLIG
— A New Era for the Pfandbrief | DR. LOUIS HAGEN
— The Future Capital Requirements of Pfandbriefe in Europe | DR. CHRISTIAN MARBURGER
— Pfandbrief Technology Gains Further Ground in Europe – Causes, Consequences,
Implications for Investments | FRITZ ENGELHARD
— Market-making for Jumbo Pfandbriefe and other Covered Bonds
| JOHANNES RUDOLPH, ALEXANDER LEUSCHEL, GREGOR BECKMANN
— Mortgage Pfandbrief Net Present Value Regulation | DR. BOY HENRICH TIMMERMANN
2005
— The Pfandbrief Market 2004/2005 | SASCHA KULLIG, BODO WINKLER
— New Pfandbrief Act as Uniform Framework for Pfandbrief Issuance Strengthens the Pfandbrief
and Germany as a Financial Center | DR. LOUIS HAGEN
— The Issuer Landscape under the Regime of the Pfandbrief Act | RALF BURMEISTER, UWE BURKERT
— Ten Years Jumbo Pfandbrief – How it all began | FRIEDRICH MUNSBERG
— The First Six Months of the European Covered Bond Council | DR. LOUIS HAGEN
— Who Invests in Pfandbriefe? Investor Structure of the Covered Bond Market | TED PACKMOHR
— Pfandbriefe in Fixed-Income Indices: A Basis for Financial Innovations | GÖTZ KIRCHHOFF
2006
— The Pfandbrief Market 2005/2006 | BODO WINKLER
— Amended Minimum Standards strengthen Jumbo Pfandbrief | Sascha Kullig
— What you Always Wanted to Know About the Secondary Market for Jumbo Covered Bonds
| BODO WINKLER
— The new, uniform supervision of Pfandbrief banks | Michael Bläser, Dieter Ullrich
— Transparency on the Pfandbrief Market – Comments from an Investor’s Perspective
| Torsten Strohrmann
— The Ship Pfandbrief as a new asset class | Thomas Schulze, Lambert Adams
— Pfandbriefe versus MBS – Rivals, or Complementary Instruments? | Michaela Lorenz
— The European Jumbo Covered Bond Market in the Footsteps of the German Pfandbrief
| Bernd Volk, Florian Hillenbrand
2007
— The Pfandbrief market 2006/2007 | BODO WINKLER
— The financing of large real estate projects and the Pfandbrief market | Frank Lamby
— New trends in the Pfandbrief banks’ public finance operations | Dr. Christoph Hausen
— The “Local and Regional Government” Rating Project | Rainer Pfau, Guido Bach
— The vdp Pfandbrief Curve | Bodo Winkler
— The US covered bond market: A long way from infancy to maturity | Sabine Winkler
95
2008
— The Legal Framework for Issuing Pfandbriefe | Dr. Louis Hagen
— Amendment of the Pfandbrief Act | Dr. Otmar Stöcker
— Market Making for Jumbo Pfandbriefe: Quo vadis? | Franz-Josef Kaufmann
— Pfandbriefe in periods of financial crisis – Quality prevails
| Ernst-Albrecht Brockhaus, Horst Bertram
— The Pfandbrief and the ECBC’s “Essential Features of Covered Bonds” | Ralf Burmeister
96
2009
— The Legal Framework for Issuing Pfandbriefe | Jens Tolckmitt, Dr. Otmar Stöcker
— Amendment of the Pfandbrief Act 2009 | Dr. Otmar Stöcker
— GGBs – only an intermezzo? | Franz Rudolf, Florian Hillenbrand
— The importance of Pfandbriefe and “SoFFin bonds” (bonds guaranteed by Germany’s
Special Fund for Financial Market Stabilisation) for Aareal Bank’s refinancing — The Aircraft Pfandbrief | Matthias Reuleaux, Tammo Reimann
— The vdp-Curve (Mortgage Pfandbrief): From Pfandbrief yield to mortgage interest
| Christian Fischer, Bodo Winkler
2010
— 2010 Amendment of the Pfandbrief Act | Dr. Otmar Stöcker
— The Cover Pool Monitor of a Pfandbrief Bank – Duties – Powers – Limits | Dr. Michael Labe
— Cover-specific Structures and Processes of a Pfandbrief Bank | Ralf Dresch
— vdp Transparency Initiative | Bodo Winkler
— Pfandbriefe – do they emerge from the crisis stronger? | Sebastian Sachs
— Changes to the Regulatory Environment of Pfandbrief Banks – Beginning of a New Era?
| Roman Berninger
2011
— The Pfandbrief Market 2010/2011 | Swen Prilla, Christian Walburg
— Effects of Basel III on the Pfandbrief-based lending business | Dirk Auerbach
— Quo vadis? The regulatory treatment of Pfandbriefe under Solvency II
| Mathias Christoph Köhne
— Pfandbriefe in Securities Indices – Current Trends and Applications
| Franz Rudolf, Florian Hillenbrand
— Roundtable Pfandbrief Banks | hosted by Michael Schulz
— The German Property Market – Guaranteeing the Sustained Value of Mortgage Pfandbriefe
| Susanne Giesemann, Christoph Kettel
— Regulation of rating agencies: Time for new priorities?
| Sascha Kullig, Horst Bertram
2012
— The Pfandbrief Market 2011/2012 | Bernd Volk
— Asset Encumbrance and German Pfandbriefe | Dr. Otmar Stöcker
— The Mortgage Lending Value: Benefit or Burden for Pfandbrief Banks? | Rudolf Baumgartner
— Pfandbriefe in Institutional Asset Management | Dieter Wolf
— Asset Management in perspective | an interview with Elizabeth Corley
— Further Cover Assets as a Necessary Component of Pfandbrief Cover Pools
| Sascha Kullig, Andreas Luckow
— A Comparison of Rating Approaches for Pfandbriefe | Matthias Melms
2013
— The Pfandbrief Market 2012/2013 | Matthias Melms and Pia Maalej
— The supervision of Pfandbrief banks | Dieter Ullrich
— Investors Roundtable Discussion | chaired by Sabrina Miehs
— The vdp credit quality differentiation model | Friedrich Munsberg
— Spread Determinants of Covered Bonds | Karsten Rühlmann and Günther Scheppler
2014
— Harmonisation of covered bond legislation? | Dr. Otmar Stöcker
— The Pfandbrief Market 2013/2014 | Franz Rudolf, Florian Hillenbrand
— Banking union and Pfandbriefe | Wolfgang Kälberer
— Capital Market Funding in Flux | Thorsten Euler
— Sustainable Investment Round Table
— Structural analysis of the Pfandbrief market | Matthias Melms, Tobias Meyerr
97
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Publisher:
Association of German Pfandbrief Banks,
Georgenstrasse 21
10117 Berlin
Telephone:+49 30 20915-100
Telefax: +49 30 20915-419
Internet: www.pfandbrief.org
Mailing address:
P.O. Box 64 01 36
10047 Berlin, GERMANY
Design:
Bert Klemp Corporate Design
Gernsheim am Rhein
20th edition, Berlin 2015
© Association of German Pfandbrief Banks, Berlin
Content effective July 2015
The Pfandbrief ISSN 1615-0104
All rights reserved. Extracts from
the Fact Book may be reproduced
only if the source is named.
The present English version of the
Fact Book and the articles presented
herein were translated from the original
German version into English and
carefully reviewed. However, in case
of doubt, the original German draft
applies.
The Fact Book is also available
in German.
101
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