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Pfandbrief trio vie to be top dog in covered bonds

Race car burning rubber
By Bill Thornhill
21 Feb 2019

Of the 13 German Pfandbriefe issued this year, a trio of deals issued by DZ Hyp, BayernLB and Deutsche Pfandbriefbank are vying for the top covered bond mark.

BondMarker is a new tool for the covered bond market, exclusive to GlobalCapital, which rates the success of covered bonds on a scale of zero to 10 across a range of criteria: timing, pricing and distribution (*).

DZ Hyp, BayernLB and Deutsche Pfandbriefbank issued covered bonds this year which all achieved marks of 8.76, this being the highest of all 13 German deals issued so far in 2019.

With 107 investors on board, Deutsche Pfandbriefbank’s (PBB) January 2024 attracted the most granular order book of any Pfandbrief. With demand of more than €1.5bn, it also boasted the highest oversubscription ratio.

However at €500m, the deal  was also one of the smallest deals issued this year and somewhat below DZ Hyp’s €750m January 2029, which received a similar score. But with a placement to 80 accounts the order book of DZ's deal was less granular.

Both deals performed by 2bp a week after launched compared to the 4bp tightening seen in BayernLB’s €500m February 2029, which scored equally highly and was only slightly less oversubscribed.

The largest deal of the year was Helaba’s €1.5bn July 2022, a size that ensured a relatively high market of 7.76, putting it in fifth place among the German deals issued this year.

Helaba’s transaction was slightly let down by the lower subscription ratio of 1.2 times, a number that was exceeded by Aareal Bank. 

With a mark of 8.33 Aareak Bank's €750m February 2024 got the fourth highest Pfandbrief mark so far this year. The transaction was more than twice subscribed and tightened by 3bp a week after launch.

(*) Half of the mark is derived from a survey based on the average score given by market participants. The other half of the mark is automatically calculated using a range of metrics — such as the deal’s subscription ratio, its performance, the granularity of the order book and the transaction’s size (see here for more details). The score for each deal can be found in the Covered Bonds Priced Deals Database.   

By Bill Thornhill
21 Feb 2019