Deutsche Hypo issues its first Green Pfandbrief

Today, Deutsche Hypothekenbank has issued a Green Mortgage Pfandbrief in benchmark format for the first time. It is the second bank in Germany that successfully placed a Green Pfandbrief in the capital market. The issue has a six year term and a coupon rate of 0.125 %. With an issue price of 99.476 % the yield is 0.213 % (minus 14 basis points to mid swap). Deutsche Hypo was supported by a bank consortium of ABN AMRO, Crédit Agricole CIB, DZ BANK, NORD/LB and UniCredit.

Within an offer period of about one hour, over 50 orders were received; the issue was more than two times oversubscribed. The most important buyers were asset managers, foundations, private banks, cooperative and savings banks, central banks and state-near investors. The share of foreign investors – even beyond Europe – was very high for this Green Pfandbrief. Deutsche Hypo gained a variety of new investors with sustainable ambitions. Deutsche Hypo could have even tightened the spread of minus 14 basis points on the basis of the order book. In view of the investor interest and with the expectation of a good secondary market performance, the Bank intentionally abstained from this.

“The bank was able to successfully implement a flagship project with this issue”, explains Andreas Pohl, Chairman of the Board of Managing Directors of Deutsche Hypo. “Connecting the quality product Pfandbrief with the financing of energy efficient real estate properties is a model of success that blends in smoothly into our sustainable business model. Thus, the issuance of the Green Pfandbrief is the natural result of our sustainability strategy and its consistent implementation in the funding process. It makes us very proud that we were able to attract additional investors for our green product.”

Before this green debut-issue a roadshow throughout Europe was held where investors gave Deutsche Hypo a consistently good and constructive feedback. It was especially acknowledged that Deutsche Hypo has successfully built up a professional sustainability management. Hence, Deutsche Hypo is able to convincingly express its ambition to establish a green value chain. With its current sustainability ratings by oekom research AG (Prime C+) and imug (Uncovered Bonds: Positive BBB, Mortgage Covered Bonds: Positive BB, Public Sector Covered Bonds: Very positive A) the bank is one of the best rated German financial institutions.

Deutsche Hypo has identified green building financings in its cover pool and added them to a green sub-portfolio. Notably, the evaluation of energy certificates and sustainability certificates were done on the basis of Deutsche Hypo’s Green Bond Framework. The funds raised are exclusively used to finance energy efficient real estate properties. Additionally, oekom research confirmed the adequacy of the entire process as well as the compliance of the Green Bond Principles by a “Second Party Opinion”. A detailed report will be published on Deutsche Hypo’s website. Thereby, investors may analyse the portfolio development as well as calculate CO2-savings connected with their investments.

Deutsche Hypo, founded in 1872, is one of the most experienced and renowned Pfandbrief banks in Germany. In addition to (Green) Pfandbriefe it also issues unsecured bearer and registered bonds.


Benchmark issue key figures

Issuer:                  Deutsche Hypothekenbank (Actien-Gesellschaft)

Format:                Mortgage Pfandbrief

WKN:                   DHY488

Maturity:              23 November 2023

Volume:               EUR 500 Million

Spread:                mid swap minus 14 basis Points

Coupon:               0,125 %

Rating:                 Aa1 (Moody’s)

Stock exchange: Hanover