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DZ HYP publishes new Report ‚The German Pfandbrief Market 2021/2022‘


Over the course of the second year of the COVID-19 pandemic, developments on the Pfandbrief market have been fairly mixed. While the market has continued to grow, the number of large-volume new public issues has decreased markedly. This is due to loans being offered by the European Central Bank (ECB) at favourable terms, which is damp-ening primary market activity. Moreover, banks have seen rising deposit balances over this period. Given the above, it is fair to assume that high new issue volumes achieved up to and including in 2019 will not be matched for the year as a whole – not even the is-suer group of ‘traditional’ mortgage banks, which regularly issue Pfandbriefe through public placements, has the power to change this.

The growth trend in sustainable covered bonds (also known as ESG covered bonds), which include Green and Social Pfandbriefe, continues apace. This is accompanied by a steady increase in the number of active ESG issuers. By mid-2021, there were already 26 banks which had at least one ESG covered bond with issuance volumes of at least €250 million – up from 20 issuers at the end of 2020.

In May 2021, the European Covered Bond Directive was transposed into national law via an amendment to the German Pfandbrief Act, providing a legal basis for the status of Pfandbriefe as “European Covered Bonds (Premium)”. However, for this to happen, the Pfandbrief Act, the main pillar of the legal framework for covered bank bonds in Ger-many, had to be amended in two stages.

German Pfandbrief Market Report 2021/2022