Germany

The low interest rate environment is causing investors to look at longer and longer paper in search of yield. Issuers are seizing the chance for long funding with private placements.

Berlin Hyp has increased the volume of mortgages eligible for its Grüner Pfandbrief, or Green Pfandbrief, by more than 50%, suggesting a second deal from the lender could soon be on its way.

German bonds may be the tightest asset class in the covered universe, but their relative value has improved lately and the market looks cheap relative to Bunds and French covered bonds, say analysts at Citi research.

Funke Mediengruppe, the German media group, has agreed an extension to its loan facilities, in one of the few amend-and-extend operations so far in 2016.

The German lender paid no premium for its sub-benchmark sized Pfandbrief, issued on Tuesday.

Andreas Dombret, executive board member of Germany’s Bundesbank, last week rejected claims that post-crisis regulation has significantly increased costs for banks and rendered bank lending less profitable.

The soft bullet maturity extension currently being considered for introduction into Germany’s Pfandbriefe law would lower the chance of a payment interruption and could mean issuers need to set aside less collateral to achieve the same rating, said Fitch. Soft bullet bonds would also not be subordinate to hard.

Rating: Aa1/—/—

Covered bond activity slowed this week with only three deals emerging, half the number seen in the prior week, with Canadian issuers at the fore.

Aroundtown Property Holdings, the German residential and commercial property company, has abandoned its attempt to induce holders of its €450m pre-IPO convertible bond to convert the bonds to equity.

ADO Properties, the Berlin housing company, raised €100m on Wednesday night with a 10% capital increase through an accelerated bookbuild, managed by Kempen & Co.

A pair of rare SSA names kept Kangaroo and Kauri bond supply ticking over this week, as Asian investor appetite drove demand.