Santander Consumer Bank recently applied for a Pfandbrief licence, DVB Bank has set up an aircraft cover pool, and National Bank AG has been considering using the asset class, in moves highlighted by HSBC Trinkaus analysts.

National Bank AG

National Bank AG, an unlisted German regional bank headquartered in Essen, had planned to issue Pfandbriefe to optimise its refinancing structure, but this has proven to be of low priority, it said in its 2012 annual report, in part because of increased deposits, and the plans have therefore been postponed.

However, the conditions are in place for the bank to be able to issue Pfandbriefe after it receives supervisory approval to do so. The bank had planned to issue an initial Pfandbrief of around Eu50m to diversify its refinancing sources.

HSBC Trinkaus analysts noted that the bank had a real estate financing portfolio of Eu1.1bn as at the end of the year.

Santander Consumer Bank AG has long been mentioned as a Pfandbrief newcomer, and in March this year the bank applied for a Pfandbrief licence from the Financial Supervisory Authority (BaFin) with the aim to improve its refinancing, according to its latest annual report. It highlighted as attractive: lower interest rates that are obtainable via Pfandbriefe in the capital markets; and the ability to secure long term funding better matched to the maturity of assets. According to the HSBC Trinkaus analysts, Santander Consumer Bank has a hypothecary portfolio (mortgages secured under the Grundpfandrecht) of some Eu4.5bn, a large portion of which is probably from the bank’s takeover of SEB’s German branches.

Neither National Bank nor Santander Consumer Bank returned requests for comment by the time of publication.

The HSBC Trinkaus analysts also noted that DVB Bank built a cover pool of Eu752m worth of aircraft loans in the first quarter of 2013, and an official at the bank confirmed that the issuer has plans to eventually sell aircraft Pfandbriefe.

“Given that we have a cover pool and a licence for Flugzeugpfandbriefe it is only logical that we would have issuance plans,” Boris Siegers, head of group treasury at DVB Bank, told The Covered Bond Report.

As to when this will take place, he could not say.

“We are in a position to issue from a technical standpoint, and the cover pool has achieved a critical mass, but beyond this we do not have concrete issuance plans,” he said.

DVB obtained a licence to issue Flugzeugpfandbriefe in July last year. Only NordLB has issued benchmark aircraft Pfandbriefe. DVB also issues ship Pfandbriefe.

Natixis Pfandbriefbank has issued its first Pfandbriefe: a Eu30m July 2016 floating rate mortgage Pfandbrief on 11 February and a Eu20m tap thereof from early March. Sparkasse Mittelthüringen, which had already issued public sector Pfandbriefe, sold its first mortgage backed deal in the first quarter, according to HSBC Trinkaus analysts.