Strong demand for MünchenerHyp’s short-maturity benchmark Mortgage Pfandbrief offering notably negative yield

Münchener Hypothekenbank eG (MünchenerHyp) marked the 250th anniversary of the Pfandbrief yesterday by successfully placing a € 500 million benchmark Mortgage Pfandbrief with a term of four years.

The Pfandbrief issue met with very heavy international demand and the order book was closed after nearly € 900 million in orders were received. The issue carries a coupon of 0.01 percent and a yield of minus 0.567 percent. The issue was placed at 2 basis points below the mid-swap rate.

“Münchener Hypothekenbank eG recorded strong growth in its commercial property financing area of business during the first half of 2019. This benchmark Pfandbrief issue is an excellent match to the maturity profile of these loans on the assets side as they have significantly shorter terms than loans made to private customers. This is the reason why we are very pleased with the tremendous demand shown by investors,” said Dr. Louis Hagen, Chairman of the Münchener Hypothekenbank Board of Management.

A total of 30 orders from 13 countries were received with Germany representing the main region with 54 percent of the issue’s volume, followed by investors from Scandinavia (26 percent), and Central and Eastern Europe (6 percent). Central banks were the primary buyer group and accounted for 47 percent of the issue’s volume followed by banks (27 percent) and asset managers (26 percent).

The transaction was accompanied by Credit Suisse, DZ Bank, BayernLB and the Hessische Landesbank.

The rating agency Moody’s has given its highest rating of Aaa to MünchenerHyp’s Mortgage Pfandbriefe.