Pfandbrief gets a wider audience
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Pfandbrief gets a wider audience

Issuer: Rheinische Hypothekenbank

Amount: €10 billion

Launch: October 1997

Arrangers: Commerzbank, Morgan Stanley Dean Witter

The MTN market may be a young pretender in the international capital markets, but at Rheinische Hypothekenbank (Rheinhyp) it has a very familiar feel. "Effectively we have been an MTN issuer for 125 years," says treasurer Georges Ruchti.

An impressive claim given that the Euro-MTN market celebrated its tenth birthday only last year. But Ruchti points to the frequent-borrower privilege enjoyed by mortgage banks under German law. "We can issue any securities in the domestic market without documenting the issues except through terms and conditions," he says. "That is exactly what happens in the MTN market."

Now Rheinhyp is on the verge of entering the market for real. A €10 billion programme is signing later this month, and with it the bank will bring a new dimension to the Euro-MTN market: the option to issue Pfandbriefe off its programme.

"We always had in mind the idea of being able to duplicate our domestic practices in the international market," says Ruchti. As Rheinhyp has Pfandbrief outstandings in excess of Dm60 billion ($33.5 billion), a programme without a Pfandbrief option would be a pale imitation of its domestic borrowing.

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