2006-01-19 PI Jumbo Ankündigung_en

Contacts:
Press Release
Jörg Müller
Phone: +49 611 348 2306
[email protected]
Aareal Bank to launch its first Jumbo Pfandbrief at the end of January
New Business significantly increased to approx. € 7 billion in the year
2005
Wiesbaden, 20 January 2006 – Aareal Bank today announced that it will
issue its first Jumbo Pfandbrief mortgage bond at the end of January. The
€ 1 billion benchmark maturity of 5 years – which has already been rated
AAA by Fitch Ratings – will be brought to the market by joint lead
managers Barclays Capital, Deutsche Bank, and Dresdner Kleinwort
Wasserstein. “The excellent rating confirms the high quality of
international assets in our cover assets pool”, said Christof Schörnig,
member of Aareal Bank’s Management Board and responsible for the
bank’s Treasury and refinancing activities.
The cover assets pool consists exclusively of first-ranked mortgages, and
is broadly diversified – both by property type and region. At present, the
pool contains loans on properties in 14 countries, including the US and
Canada, of which 66% are outside Germany. Schörnig explained that “the
bank's debut as a Jumbo Pfandbrief issuer will help to further broaden its
presence on the capital markets”, pointing out that “Aareal Bank seeks to
leverage Jumbo Pfandbriefe, as a well-established international capital
market segment, to expand its placement power beyond Germany”.
He added that broadening the international diversification of the bank’s
liabilities – in line with the structure of its lending business – will
“strengthen Aareal Bank’s capital market presence by expanding its
investor base, whilst reinforcing the bank’s image as a reliable, fair and
competent issuer".
In the fiscal year 2005 the new business volume has been distinctly
increased compared to the last year . According to preliminary figures the
forecasts have been fully met. “With a total commitment volume of
approx. € 7 billion we have achieved a remarkable result for the past
fiscal year with a growth of approx. 25 % in comparison to the previous
year,” announced Schörnig.
The Jumbo Pfandbrief will be issued by Aareal Hyp AG, Aareal Bank’s
wholly-owned mortgage bank subsidiary. The bank plans to integrate
Aareal Hyp into its operations during the first quarter of 2006, and to
merge the unit with its parent within the framework of the new German
Pfandbrief Act (Pfandbriefgesetz). Aareal Bank envisages regular Jumbo
Pfandbrief issuance in the future, with up to two issues per year. “We will
raise the share of covered bond issuance in the funding mix for our
property lending business, from currently around 10% to a level between
40 and 60% in the medium term, thus reducing our funding costs by
approx. € 5 million p.a.”, said Schörnig.
The Jumbo Pfandbrief issue is currently being presented to investors by a
team of Aareal Bank’s experts, via a series of roadshows held in ten
European countries. Schörnig went on to say that “with rising capital
market yields and the traditionally strong demand at the beginning of
each year, the timing of the bank’s debut as a Jumbo issuer is excellent.