Germany

Fears in the Pfandbrief market that the SoFFin guarantee scheme would be extended from three to five years now appear certain to be realised, after the German cabinet’s approval of the amendment to the Financial Market Stabilisation Act on Tuesday. The way in which one issuer’s aspirations to execute a three year jumbo were stifled recently suggests that market participants are right to be disappointed.

Aareal Bank has applied to the German financial markets stabilisation fund (SoFFin) and will receive support in the form of a capital injection and a guarantee facility.

The Association of German Pfandbrief Banks (vdp) is optimistic about the prospects for Pfandbriefe this year, citing the success of the two jumbo Pfandbriefe issued at the beginning of this month and healthy new issuance levels since the start of the new year at a presentation in Frankfurt today (Monday).

Fitch today (Friday) placed the AAA rating of Düsseldorfer Hypothekenbank’s public sector Pfandbriefe on negative review. The rating action follows that on the issuer.

NordLB today (Wednesday) priced a Eu2bn five year bond guaranteed by the state of Lower Saxony. The deal was sold at 70bp over mid-swaps, just 5bp inside the Eu1bn five year public sector jumbo Pfandbrief issued by Landesbank Baden-Württemberg last week.

The financial institutions market today (Tuesday) burst into action with three guaranteed deals and one unguaranteed, after the quiet start to the week yesterday. And there is already speculation about the next mandate from Spain.

Postbank yesterday (Thursday) made its comeback to the jumbo Pfandbrief market, just one day after LBBW reignited the market with a Eu1bn five year public-sector jumbo.

Deutsche Postbank has opened books on a jumbo Pfandbrief issue, just a day after Landesbank Baden-Württemberg revived the German market with the first such deal since August last year.

Fitch yesterday (Tuesday) affirmed the ratings of Hypo Real Estate’s operating subsidiaries at A- with a stable outlook.

Landesbank Baden-Württemberg today (Wednesday) launched the first jumbo Pfandbrief since 26 August last year, a five year transaction that is set to be priced this afternoon at the tight end of guidance.

Standard & Poor’s has put HSH Nordbank’s long term A rating on CreditWatch negative because it is concerned about the bank’s exposure to the shipping industry, which the rating agency said has a bleak outlook.

Standard & Poor’s yesterday changed from stable to negative its outlook on Norddeutsche Landesbank and its wholly-owned subsidiaries, Norddeutsche Landesbank Luxembourg and NordLB Covered Finance Bank. The long term ratings were affirmed.