BayernLB arranges record €700m promissory note

German lender BayernLB has issued a €700 mln promissory note loan for Berlin housing company Gewobag Wohungsbau-Aktiengesellschaft in partnership with LBBW.

BayernLB said the note was the largest of its kind ever arranged for a real estate firm to be placed on the market.

With a maturity of up to 40 years, it also marks the longest registered company bond, the lender noted.

More than 100 investors - primarily insurers, savings banks, asset managers and pension funds - participated in the debt issue. The housing company's appeal lay in its municipal background, business model, good reputation and ratings of A+ (S&P) and A1 (Moody's), BayernLB said.

Despite representing a fourth promissory note issue for the housing provider, BayernLB recorded an almost eightfold oversubscription. As a result, the issue volume was increased from the original €200 mln target to €700 mln.

The volume was spread over fixed and variable tranches from 400 days to 40 years, with more than 72% of the order volume concentrated on tranches of 12 years or more. BayernLB noted that the average maturity was 22 years, underlining high levels of investor confidence, according to the bank.

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