The Pfandbrief 2011 | 2012

Der The Pfandbriefmarkt Market 2010/2011
ECB Covered Bond Purchase Program Brought to Successful Conclusion
On June 30, 2010, the ECB concluded its covered bond purchase program. The purchases
came to a total of €60 billion, distributed among 422 bonds; the primary market accounted
for 27% and the secondary market for 73% of all purchases. Immediately following the
announcement on May 7, 2009, positive effects for the primary and secondary market were
discernible.
In the opinion of the ECB, the objectives that had been set with the program were
achieved. The program improved market liquidity, bringing it close to pre-2008 levels, and
relaxed the refinancing conditions for banks and enterprises. It also facilitated the re-opening
of the primary market for Jumbo Pfandbriefe. Nevertheless, according to analyses by the
ECB, the aggregate volume of bank refinancing was not increased. Instead, costly uncovered
refinancing was replaced by more favorably priced covered bonds. Banks’ refinancing costs
were thus reduced. In this way, banks were encouraged to maintain or expand their lending
volumes. On the secondary market, the announcement of the program was itself enough to
trigger a marked narrowing of spreads, although the extent to which spreads tightened varied
fairly considerably from one jurisdiction to the next. The conclusion of the program did not
harm issuance in Covered Bonds going forward
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vdp Transparency Initiative on Data Required under §28 Pfandbrief Act
Attracts Great Interest
On September 20, 2010, the vdp Pfandbrief banks launched the publication on the vdp’s website
of individual transparency data. Demand by and response from investors, analysts and
other market players underscore the success of this initiative, which is also demonstrated by
the number of downloads. At end-June 2011, the data of the first quarter of 2011 alone had
been downloaded almost 6,000 times. In particular, the rising number of downloads in CSV
format, which makes computerized further processing possible, testifies to the high level of
acceptance of the transparency initiative. The main focus of analysts’ interest is on the quality
and composition of the cover pools. An e-mail alert function has since been installed on the
vdp website pages on the data required under § 28. This function provides automatic notification
when new information is available on these pages.