Enquired – Aareal Bank 2029 Mortgage Pfandbrief

At the beginning of the year, the capital market environment was characterised by the tense situation on the commercial property markets. This led to a sharp widening of spreads on the secondary market. We also felt this ‘headwind’ when we placed our first Pfandbrief benchmark at the beginning of the year. However, following the publication of our very solid first-quarter figures and intensive roadshow activities both in Germany and in other European countries, the outlook for Aareal Bank’s credit has become much more positive again. In May, we then decided to capitalise on the very constructive capital market environment to successfully place our first non-preferred senior (SNP) bond as a green bond. The bond was more than three times oversubscribed and was particularly sought after by asset managers from France and the UK/Ireland. The spread has narrowed significantly since the bond was issued. We have now rounded off our funding plan for the first half of the year with the likewise very successful placement of our second Pfandbrief benchmark transaction this year. The order book peaked at over 1.8 billion euros. The bond was also oversubscribed several times and the spread has narrowed further since then.

In discussions with investors, the focus was on the commercial property markets, particularly the office property market in the USA. However, we were able to ensure that many investors are now taking a more differentiated view of commercial property. It was important here to give investors a high level of transparency about our broadly diversified portfolio of commercial property financing in 20 countries and across five asset classes. Added to this are our very strong capital and liquidity ratios as well as the Bank’s high earning power, which allows us to make extensive risk provisions and actively reduce our non-performing loans.

After the summer break, we expect another EUR-denominated Pfandbrief transaction in line with current planning. And analogous to the SNP bond issue in May, which was only planned for November, the issue of a Tier 2 bond in the second half of the year, which is actually not planned until 2025, cannot be ruled out if the market environment remains favourable.