Aareal Bank has issued its inaugural Green Pfandbrief, marking an important milestone in its refinancing strategy. The mortgage Pfandbrief, with a volume of €625 million and a six-year maturity, was issued in line with the standards of the Association of German Pfandbrief Banks (vdp) and met with strong investor demand.
The transaction was more than two times oversubscribed and enabled pricing at 33 basis points over mid-swaps, with around 57% of orders coming from green investors. Demand was predominantly from the DACH region and the Nordics, as well as from five other European countries, and was primarily driven by banks and asset managers/funds.
With this transaction, Aareal Bank is entering the green covered bond market and strategically broadening its sustainable product portfolio and funding mix. The joint lead managers for the transaction were Deutsche Bank, Crédit Agricole, Barclays, DZ Bank, LBBW, Helaba and Société Générale.
“This transaction underscores how deeply sustainability is embedded in our core business. The strong demand also shows that green products continue to be highly relevant in the capital markets and are helping us further broaden our investor base,” said Daniel Höfelmann, Head of ESG.
From a Treasury perspective, the issuance also marks an important milestone. “The successful execution of this transaction reflects the outstanding collaboration with the ESG team, through which we brought a complex project to market. The Green Pfandbrief also represents another step in diversifying our funding mix,” said Christopher Linnert, Head of Funding.
The issuance forms part of Aareal Bank’s broader sustainability strategy. With the Green Pfandbrief, Aareal Bank combines its core expertise in the Pfandbrief business with a measurable sustainability contribution, while further strengthening the long-term resilience of its business model.
