Jumbo Pfandbrief

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Jumbo Pfandbrief is the banking term for a Pfandbrief with a market volume of at least 1 billion euros .

General

In the case of Jumbo Pfandbriefe, the market liquidity and market breadth of the issues play a special role. This market segment of large-volume Pfandbriefe is based on the liquidity requirements of international institutional investors , which also contribute to a large trading volume . However, market making ensures that small investors also receive a buy and sell price for these Pfandbriefe on each trading day. The term Jumbo Pfandbrief is not legally defined, but there are so-called minimum standards that have been set by the issuers (especially the Association of German Pfandbrief Banks ) and define what constitutes a Jumbo Pfandbrief.

The decisive factor is the market volume of the entire issue, which according to the “minimum standards for the issue of Jumbo Pfandbriefe” must be at least 1 billion euros. The actual trading volume on the stock exchanges , however, is not decisive. Pfandbriefe that were issued after January 9, 2012 are given jumbo status, provided that they have an outstanding volume of at least EUR 1 billion, with no specific minimum volume limit at the time of initial issue. Jumbo Pfandbriefe issued before January 9, 2012 had to have a volume of at least EUR 750 million when they were first issued and had to be increased to EUR 1 billion within 180 calendar days.

history

The Prussian King Frederick the Great introduced Pfandbriefe as securities in 1769 in order to counter the credit crunch of the nobility at the time and to promote the rebuilding of Prussia, which had been devastated by the war. The first Jumbo Pfandbrief was issued in May 1995 by Frankfurter Hypothekenbank .

The attempt to restart market making for Jumbo Pfandbriefe by telephone , which began in September 2008 , failed because the Lehman Brothers went bankrupt shortly afterwards .

criteria

A few criteria that a Jumbo Pfandbrief must meet:

  • The minimum volume must be 1 billion euros. For the first issue, the volume can be 750 million euros, but the issuer is then obliged to increase it to at least 1 billion euros within 180 calendar days.
  • It must be a fixed-interest bullet bond with an annual interest payment in arrears (so-called straight bonds ).
  • At least five market makers must be appointed who will simultaneously provide bid and ask prices for trades up to 15 million euros during normal trading hours . The issuer can perform this function himself. The market makers are obliged not to exceed certain ranges when quoting bid and ask prices .
  • The Pfandbrief must be introduced on an organized market in an EU member state or in another signatory state to the European Economic Area immediately after it has been issued .

These and other criteria are set out in the Minimum Standards for Jumbo Pfandbriefe , which are published on the website of the Association of German Pfandbrief Banks .

Indices

The German Börse AG calculates the stock market index eb.rexx® Jumbo Pfandbriefe . It contains the 25 most liquid Pfandbriefe on the EurexBonds trading platform with remaining terms of between 1.5 and 10.5 years. There is also an index family for various remaining terms.

Country jumbos

Jumbo bonds are also known as joint public bonds from smaller federal states or city ​​states (such as Bremen , Hamburg , Mecklenburg-Western Pomerania , Rhineland-Palatinate , Saarland , Schleswig-Holstein and Thuringia ), which alone do not reach a capital market size and are only capital marketable through a bundled bond volume Bringing together amounts. The federal states involved assume the obligations from debt servicing (interest and repayment payments) in accordance with their respective quota of the total volume of the issue . A joint and several liability, according to Art. 109 3 para. Constitution excluded. They are no different from other bonds in terms of their bond terms . The first joint loan of this type was issued by 7 federal states in August 1996 and had a volume of DM 4 billion.

Web links

Individual evidence

  1. ^ VdP Association of German Pfandbrief Banks e. V., Pfandbrief Segments , 2020
  2. ↑ Stiftung Warentest: Pfandbriefe - Solid Bargains , in: Finanztest 09/2000 (accessed on February 4, 2013)
  3. ↑ Deutsche Sparkasse newspaper of August 13, 1996, country jumbo over four billion DM
  4. ↑ Frankfurter Allgemeine No. 176 of July 31, 1996, Jumbo countries with a coupon of 6 percent , p. 17