Germany

Berlin Hyp became the first European bank to have issued in green, social and sustainability-linked formats with the launch of a €750m 10 year mortgage Pfandbrief on Tuesday supporting affordable housing, and the bank plans to be a similarly familiar face in the social market as it is in green bonds.

Deutsche Kreditbank (DKB) on Thursday issued the first benchmark social mortgage Pfandbrief, a €500m 10 year that attracted €2.36bn of orders and which tackles the politically sensitive topic of housing in its hometown of Berlin.

Berlin Hyp became the first bank to issue a sustainability-linked bond (SLB) on Tuesday, 13 April, with a €500m 10 year senior preferred deal. Bodo Winkler-Viti, Berlin Hyp’s head of funding and investor relations, discussed with Sustainabonds’ Neil Day the pioneering first issue, the rationale for adopting the new instrument and the bank’s choice of metrics, and how SLBs fit in with its green bond issuance.

Berlin Hyp became the first bank to sell a sustainability-linked bond (SLB) yesterday (Tuesday), issuing a €500m 10 year senior preferred bond with a coupon step-up should it not hit a carbon reduction target, in a “courageous” move that met with dedicated investor interest and achieved tight pricing.

Berlin Hyp is set to become the first bank to launch a sustainability-linked bond next week, a 10 year senior preferred issue tied to a sustainability performance target of a 40% reduction in the carbon intensity of buildings financed by its loan portfolio.

The Association of German Pfandbrief Banks (vdp) has established minimum standards for Social Pfandbriefe, which build on existing green and social standards, and proponents hope they will encourage standardisation and provide impetus to the sector.

MünchenerHyp issued its first senior green bond on Wednesday, a €500m eight year deal that is also its first senior non-preferred euro benchmark, with the German bank moving to take advantage of persistent demand in credit markets at higher yields in spite of elevated rates volatility.

North Rhine-Westphalia is the only German state to have issued sustainable bonds and is planning a seventh later this year. Axel Bendiek, head of treasury and investor relations, and Kirsten Häger, head of sustainable finance, at the ministry of finance of the State of North Rhine-Westphalia (NRW), told Sustainabonds’ Neil Day how transformation towards a more sustainable economy underpins its strategy.