The Pfandbrief 2011 | 2012

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The Legal Framework for Issuing Pfandbriefe Separation Principle in the Event of the Pfandbrief Bank’s Insolvency A key component of the safeguarding mechanisms enshrined in the Pfandbrief Act are the provisions contained in § 30 ff Pfandbrief Act, which regulate what happens to the cover pools and Pfandbriefe in the event of the issuer’s insolvency. Under this preferential right the cover pools are at the disposal in the first instance of the Pfandbrief creditors and, under certain circumstances, of the derivative creditors in the event of the Pfandbrief Bank becoming insolvent, to satisfy their claims. This means that the Pfandbrief Bank’s insolvency does not affect them. To ensure this preferential right, the Pfandbrief Act provides for an “emergency plan” that is set forth in detail. This is also to apply if, under the German Restructuring Act, a bridge bank is involved (§36a Pfandbrief Act). Insolvency Privilege of Pfandbrief Holders Insolvency of the Issuer Insolvency Administrator Creditors 16 Pfandbrief Bank Other assets Other Creditors Other Assets Cover Pool Administrator Mortgage Loans Mortgage loans Mortgage Pfandbrief Claims against Public-Sector- Debtors Ship Mortgages Claims against Public-Sector- Debtors Ship Mortgages Public Pfandbriefe Ship Pfandbriefe Each is Pfandbrief Bank with limited business activities Aircraft Mortgages Aircraft Mortgages Aircraft Pfandbriefe Separation principle in the event of a Pfandbrief Bank’s insolvency no acceleration of Pfandbrief Pfandbrief and cover assets do not fall into the insolvency estate Pfandbrief Bank with limited business activities Cover pool administrator manages cover assets
Ring-Fencing of the Cover Pools The cover pools do not participate in the insolvency proceedings in respect of the bank’s assets. They form for each Pfandbrief category issued by the credit institution a special (ringfenced) part of the Pfandbrief Bank out of which the Pfandbrief creditors’ claims are to be satisfied, (§ 30 par. 1 Pfandbrief Act). The bank’s insolvency administrator therefore has no access to the cover pools and the Pfandbriefe do not accelerate. With regard to mortgage loans, which are in part included in the cover pools and are in part outside the cover pools, the Pfandbrief Act pro-vides that the payment flows from these loans first pass in full to the cover pool administrator (see below). The insolvency administrator can demand that the payment flows be separated at his expense, and that the payments in respect of the parts of the loans above the cover limit flow to him. Pfandbrief Bank with Limited Business Activities One question repeatedly asked concerns the legal nature of the cover pools in the event of a Pfandbrief bank’s insolvency. The answer sometimes given is that the cover pool is separated from the insolvency estate for insolvency law purposes and given the term “Sondervemögen”. This, in turn, is often misunderstood to the effect that the cover pool becomes a SPV, so that the character of a bank (and therefore the banking license) is lost. In 2009, the German Federal Government, during a so-called small parliamentary interpellation, cleared up this misconception. In its reply (Bundestag printed paper 16/13823 of July 21, 2009, no. 2) the government describes the term “Sondervermögen” as unsuitable and instead uses the expression “besonderer Teil der Pfandbriefbank” (special part of the Pfandbrief Bank) to convey the fact that the cover assets and Pfandbriefe administered by the cover pool administrator together constitute a part of the bank’s assets in its own right. The 2010 amendment of the Pfandbrief Act developed this legal notion further in that the explanatory memorandum to the bill (Bundesrat printed paper 155/10 of March 26, 2010, p. 76f) clearly states that, in the event of a Pfandbrief Bank’s insolvency, a cover pool does not constitute a legal entity but remains a special part of the Pfandbrief bank for which the term “Pfandbrief bank with limited business activities” (“Pfandbriefbank mit beschränkter Geschäftstätigkeit”) is to be used – separately for each Pfandbrief category. Moreover, it is to be stipulated under the new § 2 par. 4 Pfandbrief Act that the banking license will be retained for the cover funds, even if it is revoked for the rest of the bank. 17 Cover Pool Administrator When insolvency proceedings are initiated in respect of the bank’s assets, the court at the Pfandbrief Bank’s seat appoints one or more cover pool administrators at the request of the supervisory authority (§ 30 par. 2 Pfandbrief Act). Cover pool administrators may also be appointed before insolvency proceedings are initiated if the bank’s imminent insolvency is to be feared and such action is necessary to protect the Pfandbrief creditors. The cover pool administrator is a natural person. He has the right to manage and dispose of the cover pools, and represents the Pfandbrief creditors’ interests. The creation of the office of cover pool administrator strengthens the protection of the Pfandbrief creditors. It would be inappropriate if the management board of the insolvent bank or bank at risk of insolvency were allowed to continue maintaining the cover pools. Given the conflicting interests of the Pfandbrief creditors and the Pfandbrief Bank’s other creditors, the insolvency administrator would likewise be unable to safeguard the Pfandbrief creditors’ interests in the appropriate manner.
Page 1 and 2: The Pfandbrief 2011 | 2012 Facts an
Page 3 and 4: The Association of German Pfandbrie
Page 5 and 6: Member Institutions of vdp 84 Aarea
Page 7 and 8: Jan Bettink | president framework i
Page 9 and 10: Pfandbriefe are covered interest-be
Page 11 and 12: the special supervision of Pfandbri
Page 13 and 14: Claims against Public-Sector Entiti
Page 15 and 16: are not eligible as cover. These re
Page 17: and to meet liquidity management co
Page 21 and 22: all. Instead, they are part of the
Page 23 and 24: In changeable times, investors look
Page 25 and 26: Monthly sales of new issues in 2010
Page 27 and 28: Pfandbrief-Bund-Spreads in % 200 18
Page 29 and 30: vdp Initiative for the Improvement
Page 31 and 32: As a reaction to the problems and r
Page 33 and 34: The The significance of common equi
Page 35 and 36: waiving exemption from retroactive
Page 37 and 38: For banks specialising in public se
Page 39 and 40: Solvency II is intended to reform t
Page 41 and 42: Spread and counterparty risk The eq
Page 43 and 44: Counterparty default risk Mortgage
Page 45 and 46: liabilities and which plan to optim
Page 47 and 48: “Benchmarks” are reference or c
Page 49 and 50: account of its macro strategy, has
Page 51 and 52: iBoxx COVERED BOND INDICES (JUNE 20
Page 53 and 54: EuroMTS Index The EuroMTS Covered B
Page 55 and 56: eb.rexx INDEX FAMILY eb.rexx Overal
Page 57 and 58: The question of the ETF’s replica
Page 59 and 60: Cover Ausgehend assets von from ein
Page 61 and 62: Michael Schulz, NordLB; Bodo Winkle
Page 63 and 64: BW: The German mortgage lending val
Page 65 and 66: What, in your opinion, will investo
Page 67 and 68: The fallout of the financial and ec
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cue fund, first and second economic
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Latest Developments on the Rental M
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Driven by such healthy fundamentals
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Residential Properties The German r
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It is time for new priorities in th
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explain the new assumptions and the
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tion in the industry outlook in one
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Reduce the Significance of External
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84 Aareal Bank | Wiesbaden 86 Bayer
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Aareal Bank AG Paulinenstrasse 15 6
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BayernLB Brienner Strasse 18 80333
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Berlin-Hannoversche Hypothekenbank
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Bremer Landesbank Kreditanstalt Old
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COREALCREDIT BANK AG Corealcredit H
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DekaBank Deutsche Girozentrale Main
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Deutsche Apotheker- und Ärztebank
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Deutsche Genossenschafts-Hypotheken
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Deutsche Hypothekenbank (Actien-Ges
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Deutsche Kreditbank AG Taubenstrass
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Deutsche Pfandbriefbank AG Freising
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Deutsche Postbank AG Friedrich-Eber
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Deutsche Schiffsbank AG Domshof 17,
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Dexia Kommunalbank Deutschland AG C
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Düsseldorfer Hypothekenbank AG Ber
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DVB Bank SE Platz der Republik 6 60
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Eurohypo Aktiengesellschaft Helfman
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Hamburger Sparkasse AG Adolphsplatz
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HSH Nordbank AG Gerhart-Hauptmann-P
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ING-DiBa AG Theodor-Heuss-Allee 106
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Kreissparkasse Köln Neumarkt 18 -
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Landesbank Baden-Württemberg Am Ha
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Landesbank Berlin AG Alexanderplatz
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Landesbank Hessen-Thüringen (Helab
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M.M.Warburg & CO Hypothekenbank AG
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Münchener Hypothekenbank eG Karl-S
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Nord/LB Norddeutsche Landesbank Gir
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SaarLB Landesbank Saar Ursulinenstr
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SEB AG Ulmenstrasse 30 60325 Frankf
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Sparkasse KölnBonn Hahnenstrasse 5
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UniCredit Bank AG (former Bayerisch
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VALOVIS BANK AG Theodor-Althoff-Str
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Westdeutsche ImmobilienBank AG Gros
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WestLB AG Herzogstrasse15 40217 Dü
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WL BANK AG Westfälische Landschaft
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Wüstenrot Bank AG Pfandbriefbank H
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IKB Deutsche Industriebank AG Wilhe
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Other Pfandbrief Issuers 2010 As at
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Moody’s rating for a covered bond
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Topics covered in 1996 - 2010 1996
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2006 — The Pfandbrief Market 2005
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167
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Head Office Brussels Office Liaison
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