DZ HYP successfully places dual-tranche issue

• Benchmark dual-tranche issue with one Green and one conventional Pfandbrief
• Issue size: €500 million each
• Maturities: 4.4 years (Green) / 9.9 years
• Coupons: 2.50 per cent (Green) / 3.00 per cent

DZ HYP placed a benchmark dual-tranche issue on Wednesday, 2 April 2025. There was particularly high investor interest in the €500 million, 2.50 per cent Green Mortgage Pfandbrief, which matures on 31 August 2029. The longer-dated tranche, which also has an issue size of €500 million, has a 3.00 per cent coupon and matures on 28 February 2035. This conventional Mortgage Pfandbrief was also in great demand. The issue was placed by an international syndicate comprising Crédit Agricole CIB, DZ BANK, ING, LBBW, NatWest Markets and UBS. 

After the transaction was announced on Tuesday, the order book for the green tranche was opened the following morning with a spread of 33 basis points over mid-swap (vs. 6-month Euribor). The longer-dated conventional tranche started at mid-swap plus 51 basis points (also vs. 6-month Euribor). 

The high level of investor interest led to a dynamic order book volume development for both tranches. The final spread for the Green Mortgage Pfandbrief was set at mid-swap plus 26 basis points (vs. 6-month Euribor), with an allocable order book volume of €2.3 billion carried by a total of 86 investors. The final spread for the longer-dated tranche was fixed at mid-swap plus 47 basis points – here, 55 investors created an allocable order book volume of €1.35 billion.

As DZ HYP’s CEO Sabine Barthauer commented: “We are delighted with the excellent outcome of our dual-tranche placement. The strong demand demonstrates the high level of interest in DZ HYP’s Pfandbrief issues among investors. We are especially pleased to issue a Green tranche following the update to our Green Bond Framework, thereby emphasising our commitment to helping to transform the real estate sector. As well as this, the longer-dated tranche offers investors the opportunity to lock in an attractive three per cent coupon and, in turn, to benefit from the current higher interest rate levels.”

The Green Mortgage Pfandbrief attracted particular investor interest from the Germany, Austria and Switzerland (“DACH”) region, which accounted for 52.2 per cent, followed by Scandinavia (18.0 per cent), the Benelux countries (14.6 per cent) and Southern Europe (8.3 per cent). With regard to investor types, banks accounted for the largest share at 44.7 per cent. Central banks and public-sector institutions made up 27.7 per cent, followed by asset managers and funds (17.1 per cent). 

The regional distribution of the longer-dated tranche was also dominated by the DACH region (86.9 per cent), followed by Scandinavia (5.4 per cent) and Southern Europe (5.2 per cent). Here, the investor breakdown showed banks as being by far the largest group (75.7 per cent) while asset managers and funds accounted for 20.9 per cent and insurance companies for 3.4 per cent.