NordLB targets €500m Pfandrbief in Q4 to boost funding

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Norddeutsche Landesbank's (NordLB) hopes to issue a €500 million ($683 million) repeat Pfandbrief, or covered bond programme, in the fourth quarter to increase the financier's funding for aviation.

Harald Brauns, NordLB's head of aviation finance, says the bank plans to follow-up the financing with a third Pfandbrief in 2014, backed by US dollars.

The bank wanted to issue the seocnd transaction at the beginning of this year, but due to unstable market conditions, delayed the financing.

According to Brauns, the bank will close $1 billion in aircraft financing transactions in the fourth quarter.

Proceeds from the Pfandbrief would be redeployed in the bank's €8 billion aircraft portfolio.

NordLB sold its first €500 million aviation Pfandbrief at a coupon of 1.625% in July 2012.

In a statement the bank indicates the final book on its first aircraft Pfandbrief reached "more than two times [the] size of targeted benchmark volume" allowing the financier to reduce spread talk to 55 basis points over mid-swap.

The spread target initially on the five-year Pfandbrief was at 60 basis points, says NordLB.