Inquired: MuHyp's second Green Pfandbrief

We are very satisfied with our second Green Pfandbrief deal; the issue spread achieved is particularly noteworthy. We started with a very tight indication. In the further course of the pricing, we were able to adjust it yet downwards again and thus achieve a very attractive price. With a Green Pfandbrief we were able to attract additional investors, who contributed significantly to the success of the bond and the tight spread. The no-grow EUR 500 million size of the issue communicated in advance also supported this.

In the weeks before the transaction, the inversity of the yield curve came down somewhat. Furthermore, yield-increases slowed down. At the same time, we observed a somewhat weakening demand for shorter maturities. This led to a strong increase in investor interest for maturities between 7 years and 10 years.

However, investors are demanding significant concessions spread-wise. However, these are lower for German Pfandbrief issuers than for comparable covered bonds. The week before our issue was characterized by very good demand for 10-year Pfandbriefe. We wanted to differentiate ourselves somewhat from this and therefore chose the long 7 years as the maturity.

The sustainability goals adopted by politicians encourage us to continue to push ahead with the consistent implementation of our own sustainability strategy. The answer to this question can therefore be a clear yes.  As part of our ESG strategy, we want to embed sustainability even more deeply in Münchener Hypothekenbank’s core business and further expand our range of sustainable real estate financing products. In the spirit of the circular economy, this includes sustainable refinancing through Green Pfandbriefe. And this has a certain tradition at Münchener Hypothekenbank. We issued the world’s first sustainable Pfandbrief in 2014 and are thus considered a pioneer in sustainable refinancing via Pfandbriefe and other green bonds.

By firmly anchoring the ESG strategy in real estate financing, the origination of new loans you mentioned is assured. This means that the necessary cover assets for the issuance of green bonds are available. However, we will not limit ourselves to Pfandbriefe, but will also include other product categories in sustainable refinancing. One example is a green tier 2 bond that we recently issued in Switzerland.  This issue was very successfully placed with investors. This is also due to our high level of innovation, which we achieved in this transaction by combining sustainability and the Tier 2 bond.