The Pfandbrief has a long tradition in Germany going back to its creation in 1769. Mortgage banks were first authorised to refinance mortgage lending through the issuance of mortagage-backed securities (Pfandbriefe) in the mid 1800s. The German Mortgage Bank Law (Hypothekenbankgesetz), which was enacted at the same time as the German Civil Code (Bürgerliches Gesetzbuch) on 1 January 1900, provided the legal framework for the issuance of Pfandbriefe. 

The abolition of government guarantees for public sector banks resulted in a uniform legal basis under the Pfandbrief Act (Pfandbriefgesetz) which took effect on 19th July 2005. Cover pools, which are insolvency-safe and administered by an independent public trustee, combined with excess cover and  restrictive legal requirements provide a level of protection afforded to holders of Pfandbriefe that is higher than that of ordinary bonds. Rating agencies have, therefore, generally assigned very good ratings to Pfandbriefe.

The Pfandbrief is the primary instrument used for refinancing by pbb Deutsche Pfandbriefbank, one of the largest issuers on the German Pfandbrief market. Given the focus of its business on real estate and public investment finance, public sector and mortgage Pfandbriefe are the two main instruments used to refinance the bank. In addition to benchmark issues to the capital markets at large, private placements in the form of registered Pfandbriefe also play an important role and can be tailored to meet the individual needs of investors. 

Mortgage Pfandbriefe

For the refinancing of cover pool eligible real estate business, Mortgage Pfandbriefe are issued (outstanding Pfandbriefe as of 31/03/2012: EUR 13.5 bn).

Our real estate cover pool is composed of the following:

Public Sector Pfandbrief

Public Investment Finance is refinanced by public sector Pfandbriefe (outstanding Pfandbriefe as of 31/03/2012:  EUR 33.3 bn).

Our public sector cover pool is composed of the following: