London, 01-17-96 -- Moody's Investors Service assigned long-term ratings of Aaa to several public sector-secured bonds (oeffentliche Pfandbriefe) and Aa1 to several mortgage bonds (Hypotheken Pfandbriefe) issued by Deutsche Pfandbrief- und Hypothekenbank AG (DePfa-Bank). This is the first time that Moody's has assigned public ratings to any German Pfandbriefe. In assigning Pfandbrief ratings, Moody's said that it regards the credit characteristics of these debt instruments to be directly linked to the creditworthiness of DePfa-bank itself -- as defined by the bank's existing Aa3/Prime-1 deposit rating and C+ financial strength rating. Nevertheless, Pfandbrief ratings are higher than long-term deposit and senior unsecured debt ratings owing to comparatively greater timeliness predictability for debt servicing and especially to the smaller loss-severity potential in the event of a default. MOODY'S RATES DEPFA BANK'S PUBLIC SECTOR-SECURED BONDS (OEFFENTLICHE PFANDBRIEFE) AT Aaa AND THE BANK'S MORTGAGE BONDS (HYPOTHEKEN PFANDBRIEFE) AT Aa1
Regarding the rating differential between public sector-secured bonds and mortgage bonds, Moody's noted the comparatively lower risk characteristics of the public sector loan pool covering public sector-secured bonds.
Deutsche Pfandbrief- und Hypothekenbank AG, headquartered in Wiesbaden, is Germany's largest privately incorporated mortgage bank (not counting the German "mixed" mortgage banks). As of September 30, 1995, the DePfa-Bank group had consolidated assets of DM 141billion (US$ 108 billion).
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