DKB 15-year Social Pfandbrief

As Germany’s second-largest direct bank with 5.8 million customers, DKB can rely on its deposits as its main source of funding. For regulatory reasons, however, customer deposits can only be counted as a funding source for steering purposes for a maximum of ten years. However, since a very high proportion of our lending business consists of loans to our customer groups Housing and Municipalities and Social Infrastructure and these mortgage and municipal loans are often structured with a maturity of well over ten years, we use the possibility of issuing long-term bonds to refinance these loans with matching maturities.

The differences lie in the type of loans in the respective cover pools. The cover assets of Social Public Pfandbriefe comprise suitable loans to public sector borrowers such as local authorities and municipal companies. The cover assets of Social Mortgage Pfandbriefe, on the other hand, primarily include suitable mortgage loans to municipal housing companies and housing cooperatives. What both types of Pfandbriefe have in common is that they were issued under our Social Bond Framework and thus in accordance with the International Capital Market Association (ICMA) standard, and the proceeds are used to refinance suitable loans that offer added social value for society.

As our lending business continues to develop very well, it is quite conceivable that we will issue one or two more benchmarks this year. However, we are also always available for private placements. In addition, we will be publishing our new Sustainable Bond Framework in the near future, which contains the framework conditions for our social and green bonds in a single document. With this Social Pfandbrief, we have successfully placed our tenth sustainable issue (Green & Social) in benchmark format since 2016.