The Pfandbrief 2011 | 2012

Michael Schulz, NordLB; Bodo Winkler, Berlin Hyp; Tanja Stephan, Aareal Bank; Horst Bertram, BayernLB;
Rafael Galuszkiewicz, Münchener Hypothekenbank (from left to right)
BW: If a sizeable volume of house-builders’ loans is still to be found in the cover pools of traditional
mortgage banks, it is either residual holdings or loans that were originated for instance
by respective primary banks of the banking group to which a particular mortgage banks
belongs. Of course, a high level of granularity in the cover pools has a risk-reducing effect.
But granularity is also given when one residential property has many different tenants. The
percentage of apartments for rent in Germany is traditionally high by European comparison,
particularly in large cities. In the case of purely commercial properties, price developments are
more closely correlated to the macroeconomic situation, albeit with considerable regional differences.
What is ultimately important for the Pfandbrief creditor is that the Pfandbrief cover is
sufficient to service all Pfandbriefe outstanding. Moreover, it is worth bearing in mind the markets
in which the latest crisis arose – it was not the German commercial property market.
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TS: The prime consideration for investors is the stability and sustainability of the Pfandbrief
issuers’ business models. Models with an emphasis either on residential properties or on commercial
properties are both possible and sustainable. It is important that the issuers have the
necessary expertise for their lending activities, supported by modern portfolio management.
This as a whole helps reduce cover pool volatility. The higher volatility in commercial property
finance is already taken into consideration by the calculation of the mortgage lending value,
because the mortgage lending value is determined as the sustainable value of commercial
property, is usually substantially below the market value and is, therefore, also less susceptible
to fluctuation.
5.
Rating or no rating? Rating agencies are placing increasingly greater demands
on overcollateralization as a basis for giving Pfandbriefe a top rating. This leads
to larger shares of expensive, uncovered refinancing. How is this trade-off to be
resolved? Is there an answer to the question of the “right” number of ratings?
TS: Ratings and rating agencies lost much of their credibility during the financial crisis;
this cannot be reversed by changing analysis models and refining rating concepts. From the
Pfandbrief investor’s viewpoint, besides ratings, the transparency of the cover pools makes for
additional confidence. Nevertheless, ratings are at present an indispensable reference point in
the capital market – for issuers, investors and regulators alike. On the whole, more competi-