annual report - Hypo Real Estate Holding AG

Management Discussion – Segments
benchmarks is slightly in excess of €24.5 billion equivalent.
DEPFA’s activities in the primary markets this year led
to the Bank being recognised by EUROMONEY as
“Best Covered Bond Borrower 2007”.
DEPFA’s US$ benchmarks are largely placed outside
Europe (on average 70%), reflecting the strength of
DEPFA’s global investor name recognition. As the USA
is a region where the Bank has seen, and anticipates
further, significant asset growth, DEPFA is committed
to further expanding its US$ funding base with other
capital markets products, including the recently
established AAA 144A USMTN programme.
Investors in DEPFA’s ACS benchmarks are attracted by
the high quality and liquidity of these instruments and
the positive spread to sovereign and agency paper.
Despite the global credit and liquidity crisis, the secondary
market for public sector-backed covered bonds
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has remained remarkably stable in contrast to other
asset classes. DEPFA was a beneficiary of the stability
in this asset class and was therefore well positioned to
access the primary markets during the second half of
2007.
DEPFA is also an active issuer of EMTN notes, both
secured and unsecured in a wide variety of structures,
currencies and maturities either as private placements
or as public transactions. 2007 was a very strong year
for these markets, with two-thirds of DEPFA’s longterm
funding being sourced in the private placement
markets.
The success of the funding strategy employed by
DEPFA in 2007 is reflected in the fact that the Bank
raised its targeted €13.5 billion of long-term funding at
deeper sub-LIBOR levels than were achieved in 2006
or at any stage in recent years. This was achieved
whilst maintaining an average weighted tenor of new
borrowings of approximately 9 years.
Group currency breakdown of non-benchmark long-term funding transactions
EUR
USD
JPY
GBP
Other
BRL
HKD
ZAR
TRY
CHF
0 10% 20% 30% 40% 50% 60% 70%