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Pfandbriefe Roundtable 2009

There was a time at the beginning of 2009 when some analysts were unwilling to put a figure on potential jumbo issuance. Others went so far as to suggest that the first half of the year would not bring any jumbo issuance whatsoever. And for some jurisdictions, they were right - but not where Pfandbriefe were concerned. For though the secondary market is still a shadow of its former self, jumbo Pfandbriefe had begun to make a tentative comeback long before the ECB's infamous intervention (although, with an active private placement market, the...Read more

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Pfandbriefe Part I

IFR: What impact has the ECB's covered bond purchase programme had on the Pfandbrief market? Thomas Sommer, WL Bank: In the midst of the crisis we had a problem of trust. The banks did not trust each other and the effect was a massive meltdown of market liquidity and a significant widening of spreads. But, that was not a phenomenon specific to the Pfandbrief market, but to nearly all markets. At the beginning of this year we saw quite good appetite from risk oriented investors for higher-yielding bonds, for example government guaranteed bank...

Pfandbriefe Roundtable 2009: Participants

Tammo Diemer - Aareal Bank Tammo Diemer is managing director and head of treasury at Aareal Bank based in Wiesbaden. As group treasurer he is responsible for all fixed income related capital markets activities including funding, derivative business, liquidity management and asset allocation. Torsten Elling - Barclays Capital Torsten Elling is a director and head of covered bond syndicate at Barclays Capital. Based in Frankfurt, he is responsible for all Covered Bond new issues and primary trading activities. He joined Barclays in 1999 to...

Pfandbriefe Part II

IFR: The Bank of Ireland issued a covered bond at 190bp over mid-swaps this week. Can the Pfandbrief market compete with covered bonds at these levels? Elling: When we are talking about levels around the 200bp area where the Bank of Ireland opened books - later printing at 190bp and quoted at 178bp bid without any offer- it is obviously a great achievement for the Bank of Ireland. But we have to keep in mind that Irish government debt is trading around 85bp over swaps as well. So, putting this into perspective with Pfandbrief trading versus the...

Pfandbriefe Part III

IFR: So what's the liquidity situation in Pfandbriefe compared to other covered bond markets? Diemer: Well, in the market environment where spreads were continually widening, every trader had restrictions to hold bonds. Now, in an environment where spreads are continually tightening, every trader has restrictions to go short on these bonds. So I think the important development of spread tightening now needs to bring about a situation where spreads for Pfandbriefe return to previous levels of volatility. This calmer environment is the...

Pfandbriefe Part IV

IFR: So what are we anticipating from the Pfandbrief market going forward in terms of issuance volumes? Packmohr: I think the market has already returned towards healthier issuance volumes and that is going to continue. Keep in mind, however, that some of the issuers out there have been pretty active in pre funding their yearly targets. The inactivity of the last month does not necessarily mean that all issuers are going the same speed throughout the year end. Schenk: But looking forward we will hopefully come to see a more stable market. We...