Deutsche Hypo issues benchmark mortgage Pfandbrief with negative yield

Yesterday Deutsche Hypo successfully issued its second benchmark mortgage Pfandbrief in 2019. The € 500 million bond has a term of three years and a coupon of 0.01 %. With an issue price of 101.642 %, the yield is -0.531 %, which corresponds to a premium of +2 basis points to mid-swap.

After the order book was opened at 9:00 a.m., the orders quickly reached the target of € 500 million. When the books were closed, the issue was oversubscribed by a factor of around 1.6 with a total volume of just under € 800 million. Banks, asset managers, central banks and pension funds were represented in the order book. A total of more than 30 orders were received, including new investors. Both remarkably large tickets were submitted as well as smaller orders – overall a good granularity was observed. The bond was primarily issued to institutional investors in Germany, Austria, Great Britain, Scandinavia, BeNeLux and Italy as well as Asia and the Middle East. The benchmark issue was accompanied by a consortium of banks comprising ABN AMRO, Commerzbank, DZ Bank, NatWest Markets and NORD/LB.

“The capital markets are currently very challenging for all market players in this negative yield environment”, emphasises Sabine Barthauer, Member of the Board of Managing Directors of Deutsche Hypo. “We are all the more pleased that there was such strong demand for this short-term issue. In addition, the high oversubscription once again confirms our good reputation in the market”.

Deutsche Hypo is a renowned issuer on the Pfandbrief market. In addition to Pfandbriefe, it also issues unsecured bearer and registered bonds.


Benchmark issue key figures

Issuer:                  Deutsche Hypothekenbank (Actien-Gesellschaft)

Format:                Mortgage Pfandbrief

ISIN:                    DE000DHY5066

Maturity:              12 September 2022

Volume:               EUR 500 million

Spread:                mid swap plus 2 basis points

Coupon:               0.01 %

Rating:                 Aa1 (Moody’s)

Stock exchange: Hanover