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Capital Markets

Essen Hyp: leading the way with jumbos

Construction conservatism | DG Hyp: bringing new year cheer | Eurohypo: biggest in the market

Hypothekenbank in Essen was 2004's most copious issuer of jumbo Pfandbriefe, providing 19% of gross supply. At the beginning of this year it accounted for 10% of all outstanding jumbo Pfandbriefe.

Essen Hyp, 51% owned by Commerzbank Group,  is the third-largest pure mortgage bank in Germany, with total assets approaching €80 billion. Public sector lending accounts for about 75% of the balance sheet. It has annual funding requirements of between €30 billion and €35 billion.

Essen Hyp has already benefited from Moody's revised approach to covered bond ratings. Its public sector Pfandbriefe were upgraded to AAA on February 17. Essen Hyp's public sector Pfandbriefe now have AAA ratings from all three of the major rating agencies.

"Moody's stated that the rating upgrade was first of all due to the excellent quality of our public-sector cover pool, which was confirmed by the even more detailed analysis carried out as part of the new rating approach," says Essen Hyp chairman Hubert Schulte-Kemper. "Another reason is the legal framework, and in particular the mandatory present-value surplus cover of 2% in accordance with section six of the German Mortgage Bank Act.

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