There is much trumpeting, if that’s the word, in certain quarters as the jumbo pfandbrief market celebrates its 10th birthday. The team at Dresdner Kleinwort Wasserstein can trumpet louder than most because their bank has been ranked among the top three in this segment every year since the start. No-one else can claim as much.
With roots in the 18th century, the pfandbrief itself is nothing new. Over time it evolved into a specialised, highly regulated, covered bond issue backed by German mortgages and public sector loans. Until the mid-1990s, however, the market was very illiquid – easy to get into, not so easy to get out of. These were top quality assets trading at junk grade spreads.