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What is a Pfandbrief?


A Pfandbrief is a type of bond issued by German mortgage banks that's collateralised by long-term assets (property mortgages or public sector loans, for example). After public sector bonds and unsecured bank debt, pfandbrief bonds make up the third largest segment of the German bond market.

Where have you heard about Pfandbrief?

The German Pfandbrief system dates all the way back to 1769, with the Prussian king Frederick the Great introducing it to ease credit shortage in the aftermath of the Seven Years' War. The system spread rapidly throughout Europe, with the Pfandbrief Act established in 2005.

What you need to know about a Pfandbrief.

Pfandbrief debt is similar to mortgage-backed securities, with the term Jumbo Pfandbrief first brought to the market in 1995 to refer to the larger segment of the Pfandbrief market. A jumbo Pfandbrief requires a minimum issuance volume of EUR 1 billion and must be listed on the German stock exchange. Mostly associated with asset-backed securities, Pfandbrief have an average maturity of roughly five to seven years. Supplemented by several regulators, the Pfandbrief Act constitutes the statutory framework for the Pfandbrief.

Find out more about a Pfandbrief.

Understand Pfandbrief further by reading our definition of mortgage.

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