SoFFin II favours senior and could crowd out Pfandbriefe, say analysts

Analysts this week said the return of government guarantees in Germany in the form of SoFFin II could favour senior unsecured issuance and lead to the asset class crowding out Pfandbriefe. The performance of non-guaranteed Pfandbriefe could suffer, they said, although they added that the extent of that prospective underperformance was likely to be a function of the spread of new guaranteed deals, along with the amount of guaranteed debt issued.