DHB rescue: interpreted as good and bad for Pfandbriefe

The last covered bond stronghold against the financial crisis fell on Monday, when the Association of German Banks (BdB) took control of troubled lender Düsseldorfer Hypothekenbank. The BdB intends to sell the bank to a third party in the coming weeks. There has been an immediate fallout in the covered bond market, with France’s Caisse de Refinancement de l’Habitat pulling back from its new issue and German spreads widening. Read EuroWeek on Friday for the full ramifications.