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The first amendment to the Pfandbrief Act enters into force today. The amendment further improves the high Pfandbrief quality. A liquidity buffer of 180 days that Pfandbrief Banks have to maintain within their cover pools has been introduced. "This allows for the special security needs of Pfandbrief investors. Liquidity buffers above and beyond that, such as those presently called for by Standard & Poor's, would not benefit Pfandbrief investors any further", says Louis Hagen, Executive Director of the Association of German Pfandbrief Banks (Verband deutscher Pfandbriefbanken, vdp).

While the Pfandbrief is established as a benchmark in this matter, the amendment further improves its transparency. The reporting on maturity bands within the cover pools of Pfandbrief Banks has been refined. A new introduction to the Pfandbrief Act is the Aircraft Pfandbrief. It is the fourth Pfandbrief category along Public, Mortgage and Ship Pfandbriefe.

"The politicians were faced with the task of improving an already outstanding product", says Henning Rasche, vdp President. "They have done well. The amendment has made evident the commitment of lawmakers to ensure that the German Pfandbrief will continue to be the benchmark for Covered Bonds on the international stage."

"We are quite pleased with this successful termination of the first amendment to the Pfandbrief Act. It increases our belief that the Pfandbrief market will be one of the first to regain its old strength", Hagen says in closing.

Berlin, 26 March 2009

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