21/02/2013
On 21 February 2013 Commerzbank successfully issued and placed in the capital market a Small and Mid-sized Enterprises (SME) Structured Covered Bond with a volume of EUR 500 m. This new instrument is secured by a high-quality portfolio of selected SME loans. The contractual structure has similar features as a Pfandbrief. Institutional investors can obtain an attractive product to diversify their investments within the current low interest rate environment. At the same time, this product is enabling Commerzbank to extend its long-term refinancing options.
The issue has a maturity of five years and a coupon of 1.5 % p.a. It has generated investor interest of more than EUR 1 bn from over 60 institutional investors. More than half of the demand came from investors outside Germany. The Joint Lead Managers of the transaction were Commerzbank, Barclays, Crédit Agricole, and Unicredit.
'With the SME Structured Covered Bond the Mittelstandsbank of Commerzbank has developed an innovative, transparent product which provides institutional investors with an opportunity to benefit from the robust state of the German economy,' said Holger Werner, Divisional Director of Strategy and Projects in the Mittelstandsbank segment. 'The high demand for the Structured Covered Bond demonstrates, on the one hand, the attractions of the German Mittelstand for investors. On the other hand, the high quality of the Commerzbank loan portfolio is evident, in which Mittelstand loans that were selected based on strict criteria are used as collateral'.
The issue within the Commerzbank 'SME Structured Covered Bond Programme' is the first transaction of this type. 'We are pleased to have successfully brought such an innovative instrument to the market', said Roman Schmidt, Divisional Director of Corporate Finance in the Corporates & Markets segment. 'Within the current low interest rate environment, the product represents a genuine alternative for investors seeking attractive returns and a safe investment. This is particularly evident from the high demand from classic Pfandbrief investors for the issue. We are opening up a market for these instruments with this transaction'.
The SME Structured Covered Bond represents a bank Schuldverschreibung from Commerzbank with the additional security of guaranteed interest and redemption repayments. This guarantee is backed by cover assets consisting of high-quality Mittelstand loans. From the customer's perspective, the relationship between the customer and the bank will remain unaltered, since Commerzbank will continue to undertake the servicing and processing of the loans.
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About Commerzbank
Commerzbank is a leading bank in Germany and Poland. It is also present worldwide in all markets for its customers as a partner to the business world. With the business areas Private Customers, Mittel-standsbank, Corporates & Markets and Central & Eastern Europe, it offers its private and corporate clients as well as institutional investors the banking and capital market services they need. With some 1,200 branches Commerzbank has one of the densest branch networks among German private banks. In total, Commerzbank boasts nearly 15 million private customers, as well as 1 million business and corporate clients. In 2012, it generated revenues of just under EUR 10 billion with approximately 56,000 employees on average.
