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October 10, 2013

Commerzbank issues first Mortgage Pfandbrief with volume of EUR 500 million

  • Issuance is meant to refinance the residential mortgage business of the Bank
  • High demand among institutional investors, issue was several times oversubscribed
  • Product increases the long-term refinancing options for the Bank

Today, Commerzbank AG issued a Mortgage Pfandbrief on the capital market for the first time. The benchmark bond has a volume of EUR 500 million, a maturity of 7 years, and a coupon of 1.625% p.a. Institutional investors showed high interest, the issue generated an order book of over EUR 1.3 billion. More than half of the issue was placed in Germany.

Commerzbank received the permission to conduct Mortgage Pfandbrief business from the Federal Financial Supervisory Authority (Bafin) at the beginning of October 2013. The placed Mortgage Pfandbrief’s cover pool consists of Commerzbank’s residential mortgage loans and increases the refinancing options for the Commerzbank. The Mortgage Pfandbrief is meant to refinance the long-term core business in the Private Customers Segment.

“The transaction supports Commerzbank’s competitiveness and underlines our ambitions to grow in the loan business with private customers,” said Michael Mandel, Divisional Board Member Private Customers. In the first six months of 2013, the Bank’s new business volume in residential mortgages stood at EUR 4 billion and well above the previous year’s level (first six months of 2012: EUR 3 billion). In the second quarter of 2013 alone, the new business volume in residential mortgages increased by 40% over the previous year to EUR 2.3 billion.

The ratings agencies Moody's and Fitch have already announced that the Mortgage Pfandbrief of Commerzbank is to be given a high rating. From Moody’s the Bank expects an “Aa1” rating, from Fitch an “AAA” rating. The joint lead managers for the transaction were Commerzbank, Deutsche Bank, Natixis, and Unicredit.

 

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About Commerzbank

Commerzbank is a leading bank in Germany and Poland. It is also present worldwide in all markets for its customers as a partner to the business world. With the business areas Private Customers, Mittelstandsbank, Corporates & Markets and Central & Eastern Europe, it offers its private and corporate customers as well as institutional investors the banking and capital market services they need. With approximately 1,200 branches Commerzbank has one of the densest branch networks among German private banks. In total, Commerzbank boasts nearly 15 million private customers, as well as 1 million business and corporate customers. In 2012, it generated revenues of just under EUR 10 billion with approximately 56,000 employees on average.

 

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Disclaimer

This release contains forward-looking statements. Forward-looking statements are statements that are not historical facts. In this release, these statements concern the expected future business of Commerzbank, efficiency gains and expected synergies, expected growth prospects and other opportunities for an increase in value of Commerzbank as well as expected future financial results, restructuring costs and other financial developments and information. These forward-looking statements are based on the management’s current expectations, estimates and projections. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. Such factors include the conditions in the financial markets in Germany, in Poland, elsewhere in Europe and other regions from which Commerzbank derives a substantial portion of its revenues and in which Commerzbank holds a substantial portion of its assets, the development of asset prices and market volatility, in particular as a result of the ongoing European debt crisis, potential defaults of borrowers or trading counterparties, the implementation of its strategic initiatives to improve its business model, particularly to reduce its public finance portfolio in Private Customers, the reliability of its risk management policies, procedures and methods, risks arising as a result of regulatory change and other risks. Forward-looking statements therefore speak only as of the date they are made. Commerzbank has no obligation to periodically update or release any revisions to the forward-looking statements contained in this release to reflect events or circumstances after the date of this release.

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