Issuer: DePfa
Date: July 1998
Amount: Dm5 billion ($3 billion)
Bookrunners: Commerzbank, Goldman Sachs
If 1998 was the year that Pfandbriefe went global, the institution that did most to internationalize this German asset-backed product was Deutsche Pfandbrief- und Hypothekenbank (DePfa). The bank issued two jumbo global bonds in 1998. The first, issued in January, was for Dm4 billion ($2.3 billion) and later reopened and increased to Dm6 billion. But in our judgement, the second deal is, by a whisker, the best Pfandbrief issue of the year. This 10-year bond was launched in July and at Dm5 billion was not only the largest ever Pfandbrief at launch but was in fact the biggest ever Deutschmark borrowing (barring a few sovereign deals in the early 1990s).
The trend towards ever-bigger Pfandbriefe is driven by the quest for liquidity. As they strive to turn the product into one of Europe’s biggest asset classes, DePfa and other Pfandbrief issuers need investors to be able to use the product in the way they would a highly-liquid government bond. They need to be able to trade in and out of it easily and use it as collateral for other trades.