Glossary

Jumbo-Pfandbrief

German mortgage bond with an issue volume of at least €500 million

Criteria to be fulfilled by a Jumbo-Pfandbrief:

  •  The issue volume must be at least €500 million, although subsequent increases can be made in smaller amounts.
  • Jumbo-Pfandbriefe must be fixed-interest bullet bonds; interest is payable annually beginning one year after the date of issue.
  •  At least three market makers must be selected to provide simultaneous bid and ask prices for volumes of up to €15 million during the usual exchange hours. This function can also be performed by the issuer.
  •  Jumbo-Pfandbriefe must be admitted to trading in the Official Market or Regulated Market immediately after they have been issued.

The Association of German Mortgage Banks (Verband deutscher Hypothekenbanken) recommends that Jumbo-Pfandbriefe also meet the following criteria:

  •  Interest rates on Jumbo-Pfandbriefe should not move in fractions of less than one-quarter of a percentage point.
  •  The issuer should require that market makers remain within a certain spread when quoting bid and ask prices.
  •  The issuer should take steps to facilitate the placement of the bond on the international market.

Also see:  Mortgage Bond (Pfandbrief)
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