Deutsche Pfandbriefbank AG’s GBP 500 Million SONIA Mortgage Covered Bond


Hogan Lovells advised the joint lead managers Credit Suisse, HSBC, NatWest Markets Plc and Nomura on the subscription and placement of a mortgage covered bond of Deutsche Pfandbriefbank AG.

The mortgage covered bond has a nominal value of GBP 500 million and is due in 2023. This makes Deutsche Pfandbriefbank AG one of the first continental Europe based banks to issue a benchmark-bond linked to SONIA. SONIA is an alternative benchmark to LIBOR which will cease to exist after the end of 2021. It is calculated by the Bank of England based on interest rates for unsecured overnight transactions. Unlike LIBOR which is fixed in advance for a set period (e.g. 3 months), SONIA is measured on each day over the interest period to produce a final interest rate at the end. It is a (nearly) risk-free rate as it does not include any term bank credit risk or liquidity premium.

Hogan Lovells Team for the banks included Dr. Jochen Seitz (Picture – Partner), Dr. Stefan Schrewe, Frank Salzgeber (Associates) (all Capital Markets, Frankfurt).

Involved fees earner: Frank Salzgeber – Hogan Lovells; Stefan Schrewe – Hogan Lovells; Jochen Seitz – Hogan Lovells;

Law Firms: Hogan Lovells;

Clients: Credit Suisse; HSBC; NatWest Markets; Nomura;