SoFFin II risks crowding out pfandbrief

The risk that German Pfandbriefe will be crowded out by a resumption of state guarantees in the form of SoFFin II has increased. Bankers warn that the performance of non-guaranteed Pfandbriefe could suffer — however, the extent of that prospective underperformance is likely to be a function of the spread on new guaranteed deals, along with the amount of guaranteed debt that might be issued.