(as at: January 2012)
1. Minimum issue size
The minimum issue size of a Jumbo Pfandbrief is EUR 1 billion. If the minimum size is not reached with the initial issue, a Pfandbrief may be increased by way of a tap to give it Jumbo Pfandbrief status, provided all the requirements stated under Nos. 2 to 7 are fulfilled.
Only Pfandbriefe of straight bond format (i.e. fixed coupon payable annually in arrears, bullet redemption) may be offered as Jumbo Pfandbriefe.
3. Stock market listing
Jumbo Pfandbriefe must be listed on an organized market in a Member State of the European Union or in another Contracting State of the Agreement on the European Economic Area immediately after issue, although not later than 30 calendar days after the settlement date.
4. Syndicate banks
Jumbo Pfandbriefe must be placed by a syndicate consisting of at least five banks (syndicate banks).
The syndicate banks act as market makers; in addition to their own system, they pledge to quote prices upon application and bid/ask (two-way) prices at the request of investors on an electronic trading platform and in telephone trading.
6. Publishing of average spreads
The syndicate banks pledge to report daily for each Jumbo Pfandbrief outstanding (life to maturity from 24 months upwards) the spread vs. asset swap. The average spreads, which are calculated for each Jumbo Pfandbrief by following a defined procedure, are published on the vdp’s website.
7. Transfer and buyback
A subsequent transfer to the name of an investor is not permitted (restriction on transferability). It is permitted to buy back securities for redemption purposes or for cover pool monitor administration if the outstanding volume of the issue does not fall below EUR 1 billion at any time. The issuer must publicly announce any buyback, the planned volume thereof and the issue envisaged for repurchase at least 3 banking days in advance, and make sure that extensive transparency is given in the market. After a buyback transaction it is not permitted to tap the issue in question for a period of one year.
8. Loss of Jumbo Pfandbrief status
If one of the requirements stated in the above provisions is not met, the issue will lose its Jumbo Pfandbrief status. Jumbo Pfandbriefe that were issued before April 28, 2004, and have a volume of less than EUR 1 billion retain Jumbo status notwithstanding No. 1 provided the other requirements in the above provisions are fulfilled.
Rules of good conduct for issuers:
1. New issues should be announced with adequate advance notice to ensure there is sufficient time for the bookbuilding process.
2. The pricing of new issues and taps should always be market-oriented.
3. In the event of a tap, all the syndicate banks are to be notified in advance and invited to participate in the tap.
Rules of good conduct for syndicate banks:
1. The syndicate banks are to hold an adequate balance sheet volume available for trading in Jumbo Pfandbriefe.
2. Notwithstanding the lines for an issuer’s uncovered liabilities, the syndicate banks are to hold separate limits for Pfandbriefe in which they quote prices.
3. The Market Maker and Issuer Committee (MIC), to which representatives of syndicate banks and issuers belong, promotes continuous dialog between issuers and traders, and convenes in the event of disruption of trading in an issuer’s Jumbo Pfandbriefe or of the entire market.