pbb buyback program

We have been regularly offering to buy back our bonds via public tenders for many years. On the one hand, we use these buybacks to manage our balance sheet, i.e. the maturity profile on the liabilities side, and on the other, we provide liquidity to investors in partially illiquid markets. In addition, we generate a profit via the price below par. In this instance, we are offering to buy back a relatively short-dated senior preferred benchmark, which no longer plays a significant role in our liquidity planning as it matures at the beginning of 2025. We are utilising available liquidity to buy the bonds from investors who wish to sell. The two Pfandbriefe were issued out of the public sector cover pool, which is no longer a strategic business area for us. We are gradually reducing liabilities in parallel with the assets side.

The reasons why investors sell their positions are very individual; there are constantly smaller purchases and sales on the secondary market for the larger bonds. The buyback offer is attractive compared to these secondary market prices – we pay a higher price than the dealers offer with their bid/ask spreads. It is also easier to sell larger holdings in public tenders.

Public tenders are generally well received by the capital market. It is a sign of the issuer’s strength, but also a nice way of showing support to investors. The spreads for our bonds have already reacted positively, and the share price is also up – of course, there is no clear link here.

In principle, pricing is always about the desired buyback volume. A classic quantity/price decision based on the current secondary market prices. We attempt to hit the lowest price at which we can achieve the planned volume – this time € 300 million.