Further buybacks of Hypothekenbank Frankfurt jumbo Pfandbriefe could lead to the issues dipping below the Eu1bn minimum size threshold for jumbo issuance, the issuer announced on Thursday to inform investors of the possible loss of bonds’ jumbo status.

The German issuer, formerly Eurohypo, is being wound down by its parent, Commerzbank, to meet European Commission requirements linked to the lender’s bail-out. The bank on Thursday said that as the winding down process advances it has become necessary to reduce refinancings, and that it has come to buybacks of Pfandbriefe.

An official at the issuer said that the announcement was to inform investors that some of Hypothekenbank Frankfurt’s jumbo Pfandbriefe may be reduced to below Eu1bn.

“Previous buy backs would not have resulted in the respective Pfandbriefe issues dipping below the benchmark sizes,” he said. “Some jumbos were originally issued in volumes far higher than Eu1bn.”

He added that the buy backs are subject to market conditions and not pre-announced.

The issuer said that any benchmark issues falling below the Eu1bn threshold would lose their jumbo Pfandbrief status.

As of 31 December 2013, Hypothekenbank Frankfurt had Eu24.128bn of mortgage-backed Pfandbriefe and Eu19.245bn of public sector-backed Pfandbriefe outstanding. Of its total outstanding covered bonds, nine are jumbo Pfandbriefe, seven of which are mortgage-backed and two of which are public sector-backed. The longest dated is a July 2019 Hypothekenpfandbrief.

The net present value as of Q4 2013 for mortgage-backed Pfandbriefe was Eu26.863bn, and Eu19.642bn for public sector-backed Pfandbriefe.