Berlin Hyp successfully issues EUR 1.5 billion dual tranche Pfandbrief, including green bond

Berlin Hyp has successfully issued a dual tranche Pfandbrief with a total volume of €1.5 billion, combining a €1 billion conventional Pfandbrief with a €500 million Green Pfandbrief. The issuance attracted strong investor demand, underscoring the market’s confidence in Berlin Hyp’s financial strength and its commitment to sustainable finance.

The four-year conventional Pfandbrief, set to mature in February 2029, carries an interest coupon of 2.625%, while the seven-year Green Pfandbrief, maturing in November 2032, offers a 2.750% coupon. Both bonds are rated Aaa by Moody’s, with reoffer yields of 2.693% and 2.862%, respectively.

The issuance saw overwhelming investor interest, with the order books opening at 8:45 a.m. on Tuesday. Syndicate banks, including ABN AMRO, Barclays, BayernLB, Commerzbank, Credit Agricole, DekaBank, DZ BANK, Erste Group, HSBC, JP Morgan, LBBW, Natixis, Nordea, UBS, and UniCredit, initially set the spread at mid-swap +35 basis points for the four-year bond and mid-swap +45 basis points for the Green Pfandbrief. Hauck Aufhäuser Lampe Privatbank acted as co-lead manager.

By 10:00 a.m., orders had already surpassed €5 billion, with strong demand concentrated on the four-year bond, which accounted for €3 billion of orders. By 11:00 a.m., the reoffer spreads were fixed at mid-swap +28 and mid-swap +39 basis points. When the books closed at 11:15 a.m., the final order volume reached €6.2 billion, with €3.6 billion allocated to the four-year Pfandbrief and €2.6 billion to the seven-year Green Pfandbrief.

The issuance attracted participation from more than 170 investors, with over 50% of the bonds placed internationally. Investors from Nordic countries showed particularly strong interest. The largest investor group was banks, which accounted for 52% of orders for the four-year bond and 58% for the seven-year Green Pfandbrief. Funds followed with 29% and 31%, while savings banks contributed 12% and 19%, respectively.

Teresa Dreo-Tempsch, Board Member responsible for capital market business at Berlin Hyp, expressed satisfaction with the successful placement, emphasizing that the dual tranche structure and the inclusion of an ESG-labeled bond resonated well with investors.

“We are very pleased with the strong demand for this issuance. The high oversubscription and quality of the order book demonstrate investors’ trust in Berlin Hyp. By offering a combination of four-year and long seven-year maturities, alongside the ESG focus of the Green Pfandbrief, we effectively aligned with market preferences. I would like to thank our investors for their continued confidence and support,” said Dreo-Tempsch.

Berlin Hyp’s latest dual-tranche issuance not only strengthens its position in the covered bond market but also reinforces its commitment to sustainable finance, further integrating green financing into its capital market strategy.