Five times oversubscribed: Deutsche Hypo successfully taps benchmark issue

First increase of a benchmark Pfandbrief with a negative yield

Today, Deutsche Hypothekenbank successfully tapped a 6 ½ year Mortgage Pfandbrief in benchmark format by 250 million Euros. With a volume of now 750 million Euro the Pfandbrief offers a significantly higher market liquidity. The reoffer price of 102,161% means a spread of minus 7 basis points to mid swap. The yield is -0,0771%. This is not only the first benchmark increase with a negative yield, but also the longest benchmark Pfandbrief surfacing with negative yield in the market.

The demand for the Pfandbrief was enormous: 45 minutes after opening the order book more than 50 orders were received with a volume of approximately 1.300 million Euro. The issue was five times oversubscribed. The investors were mainly banks, Landesbanks, Central banks and asset managers. The orders came from Germany and Europe. The tap was accompanied by a bank syndicate of BayernLB, Crédit Agricole CIB, DZ Bank, HSBC and NORD/LB.

“The tap of the Pfandbrief perfectly fits into our successful issuing activities this year”, emphasises Andreas Pohl, chairman of the Board of Managing Directors. “Thanks to the competitive conditions of today’s transaction we ensure our strong market position in the commercial real-estate financing. It is possible that this transaction opens the window for new issues of Pfandbriefe with negative yield in the medium term marketsegment.”

Deutsche Hypo, a nearly 145-year-old Pfandbrief bank, is a renowned issuer in the market. For the total year 2016 a refinancing volume of around 5.000 million is planned. Deutsche Hypo issues Pfandbriefe as well as unsecured bearer and registered bonds.

Benchmark issue key figures

Issuer:                 Deutsche Hypothekenbank (Actien-Gesellschaft)

Format:               Mortgage Pfandbrief

ISIN:                    DE000DHY4614

Maturity:             22 February 2023

Volume:               EUR 750 million

Spread:                mid swap plus 1 basis point / mid swap minus 7 basis points

Coupon:              0.25%

Rating:                Aa1 (Moody’s)

Stock exchange: Hanover