High demand for Berlin Hyp’s €750 million mortgage bond

Offers of over €1.25 billion in a few hours greeted the issuance of Berlin Hyp’s third Mortgage Pfandbrief this year, the first in nine years without participation of the ECB Covered Bond Purchase Programme.

The five-year bond with a volume of €750 million carries a coupon of 3.375% and is rated Aaa by the rating agency Moody’s. The yield at reoffer was 3.382%.

“We are very pleased that we were able to successfully place our Mortgage Pfandbrief on the capital market despite the current volatile interest rate environment,” said Teresa Dreo-Tempsch, head of capital markets business, board of management, Berlin Hyp. “We see this as renewed vote of confidence in Berlin Hyp and in the Pfandbrief product.”

On Tuesday morning at around 8.45 a.m., the syndicate banks Citi, Commerzbank, HSBC, LBBW and UBS opened the order books for the bond announced as benchmark-sized at a spread of mid-swap +4 basis points.

At 9.40 a.m., the first book update took place. At that time, orders worth over €750 million were in the books. By the time of book closing at 11:15 am, orders had accumulated to around €1.25 billion. Already before that the deal size had been fixed at €750 million and the final reoffer spread at mid-swap +1 basis points.

A total of 53 investors participated in the Pfandbrief, 76% of whom were in Germany and the rest in Asia, Austria and Switzerland. Banks were the largest investor group with 72%, followed by central banks and official institutions and funds. Savings banks and affiliated companies accounted for 31% of the issue.

Berlin Hyp specialises in large-volume real estate financing for professional investors and housing companies and has played a pioneering role on the capital markets in the development of sustainable refinancing products.